Ch. 7 Quiz

Instructions
Ch. 7 Quiz

This assessment is worth 100 points.

  1. The trade discount results if the customer pays the bill within the discount period.
       (4 points)

      
      

  2. Amounts of trade discounts are not fixed.
       (4 points)

      
      

  3. A radio with a net price of $700 and a trade discount rate of 30 percent has a list price of $1,000.
       (4 points)

      
      

  4. A chain discount is a series of three or more successive discounts.
       (4 points)

      
      

  5. The single equivalent discount rate is found by taking the net price equivalent rate and adding it to 1.
       (4 points)

      
      

  6. The net price equivalent rate of 10/20/5 is .684.
       (4 points)

      
      

  7. FOB Shipping Point means the seller pays cost of freight.
       (4 points)

      
      

  8. 50 days from July 9 is August 28.
       (4 points)

      
      

  9. A cash discount is sometimes taken on the amount of trade discount.
       (4 points)

      
      

  10. 2/10, E.O.M. means that the credit period ends on the 10th day of the month that follows the sale.
       (4 points)

      
      

  11. Amount of trade discount equals:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  12. The complement of 28 percent is:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  13. If the net price of a stove is $900 and the trade discount rate is 40 percent, the list price is:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  14. 2/10, n/30 is an example of:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  15. A manufacturer of baseball gloves offered chain discounts of 9/6/3 to many of its customers. Bob's Sporting Goods ordered 30 gloves that had a total list price of $1,200. The amount of trade discount is:
       (3 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  16. Complete the following

    Item

    List

    Single Trade Discount

    Net Price

    Typewriter

    ?


    40%

    $600


       (3 points)

    (* 4000 character limit)

  17. Find amount of (A) Net price and (B) Trade discount
    Stove: List $1,400
    Chain discount 13/10/4
    A. ____________
    B. ____________
       (3 points)

    (* 4000 character limit)

  18. Which option yields the highest single equivalent discount?

    Option A

    Option B

    6/8/12

    7/9/10


       (3 points)

    (* 4000 character limit)

  19. Complete

    Item

    List

    Chain

    Net Price

    Single Amount of Net



    Discount

    EQ Rate

    EQ Rate Trade Discount Price

    Rug

    $1,400

    18/12

    (A)

    (B)

    (C)

    (D)


    A. _____________
    B. _____________
    C. _____________
    D. _____________


       (3 points)

    (* 4000 character limit)

  20. Calculate (A) amount to be credited and (B) Balance outstanding
    Invoice : $3,000; Terms 2/10, N/30
    Invoice Date: July 5;
    Payment amount $600;
    Date Paid: July 14

    A. ____________
    B. ____________
       (3 points)

    (* 4000 character limit)

  21. Mel's furniture received an invoice dated September 27 for 5 bedroom sets at $3,000 each. The invoice indicated a trade discount of 5/8/3. The seller of the furniture prepaid the freight of $200. Terms were 2/10 EOM. Assuring Mel pays on November 2 what amount would be paid? (Be sure to include the freight cost).
       (3 points)

    (* 4000 character limit)

  22. Pete's appliance received a bill dated July 15 for $26,000 with terms of 2/10, 1/15, N/60. On July 27 Pete sent in a partial payment of $6,000. What is the amount credited as well as the balance due?
       (3 points)

    (* 4000 character limit)

  23. Item

    List Price

    Single Trade Discount

    Net Price

    IBM Computer

    $1,200

    30%

    ?


       (3 points)

    (* 4000 character limit)

  24. Dated Invoice

    Terms

    End of Discount Period

    End of Credit Period

    Aug. 19 2000

    3/10, n/30

    ?

    ?


    Goods Received


    July 8, 2001


       (3 points)

    (* 4000 character limit)

  25. Jones of San Diego sold Long of Baton rouge a video system with a $6,000 list price. Sale terms were 2/10, n/30 FOB San Diego. Jones agreed to prepay the $35 freight. Assuming long pays the invoice within the discount period what does Long pay Jones?
       (3 points)

    (* 4000 character limit)

  26. Morgan Company received from Lee Company an invoice dated September 27. Terms were 2/10 EOM. List price on the invoice was $5,000 (freight not included). Morgan receives a 9/7 chain discount. Freight charges are Morgan's responsibility but Lee agreed to prepay the $150 freight charge. Morgan pays their invoice November 9. What does Morgan pay Lee?
       (3 points)

    (* 4000 character limit)

  27. Item

    List Price

    Single Trade Discount

    Net Price

    Phone

    ?


    20%

    $500


       (3 points)

    (* 4000 character limit)

  28. Gross invoice (includes freight): $500
    Freight: $100
    Date of Invoice: 9/10
    Terms: 3/10, 1/15, n/30
    Date of payment: 9/22
       (3 points)

    (* 4000 character limit)

  29. Marvin Gate bought some fencing from a wholesaler for $6,000. The wholesaler offered a trade discount of 35 percent. What was the original price? (Round to nearest cent.)
       (3 points)

    (* 4000 character limit)

  30. A manufacturer of ice skates offered a chain discount of 7/5/1. Bobby's Sport Shop ordered 30 pairs of skates that had a list price of $925. What was the amount of the trade discount?
       (3 points)

    (* 4000 character limit)


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