Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 5, Problem 5QC
To determine
To identify: The correct statement to explain “WP offers credit terms of 3/10, n/45”.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Washington Products offers credit terms of 3/10, n/45. Which of the following statementsis correct?a. The customer can take a 3% discount if the bill is paid within 45 days of the invoice date.b. The total amount of the invoice must be paid within 10 days of the invoice date.c. A discount of 3% can be taken if the invoice is paid within 10 days of the invoice date.d. No discount is offered for early payment.
The credit terms offered to a customer by a business firm are 2/10, n/30, which
means that
the customer must pay the bill within 10 days.
the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice
date.
the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day
from the invoice date.
two sales returns can be made within 10 days of the invoice date and no returns
thereafter.
What does "2/10" mean, with respect to "credit terms of 2/10, n/30"?
A.
A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date.
B.
Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice.
C.
A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date.
D.
Interest of 10 percent will be charged if invoice is paid after two days.
Chapter 5 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 5 - A doctor for the Benson Family Practice performs a...Ch. 5 - On March 15, Maxwell Plush sold and shipped...Ch. 5 - Prob. 3QCCh. 5 - What is the financial impact on a company when a...Ch. 5 - Prob. 5QCCh. 5 - Which of the following statements is true? a....Ch. 5 - Duncan Corporation began 2018 with a balance in...Ch. 5 - Use the following information to answer questions...Ch. 5 - Jackson Company had the following information in...Ch. 5 - If uncollectible accounts are determined by the...
Ch. 5 - Refer to Question 10. Using the...Ch. 5 - Refer to Question 10. Using the...Ch. 5 - Accounts Receivable has a debit balance of 2,500,...Ch. 5 - Swan Corporation received a four-month, 8%, 1,650...Ch. 5 - What is the maturity value of a 30,000, 12%,...Ch. 5 - If the adjusting entry to accrue interest on a...Ch. 5 - Net credit sales total 1,264,800. Beginning and...Ch. 5 - From the following list of accounts, calculate the...Ch. 5 - Prob. 5.1ECCh. 5 - LO 1 (Learning Objective 1: Apply GAAP for proper...Ch. 5 - LO 1 (Learning Objective 1: Record a credit card...Ch. 5 - LO 1, 2 (Learning Objectives 1, 2: Apply GAAP for...Ch. 5 - Prob. 5.4SCh. 5 - (Learning Objective 3: Account for sales...Ch. 5 - (Learning Objective 4: Account for accounts...Ch. 5 - LO 5 (Learning Objective 5: Evaluate...Ch. 5 - LO 5 (Learning Objective 5: Evaluate...Ch. 5 - LO 6 (Learning Objective 6: Account for notes...Ch. 5 - LO 6 (Learning Objective 6: Account for notes...Ch. 5 - Prob. 5.11SCh. 5 - LO 7 (Learning Objective 7: Evaluate liquidity...Ch. 5 - LO 1, 2 (Learning Objectives 1, 2: Apply GAAP for...Ch. 5 - Prob. 5.14AECh. 5 - Prob. 5.15AECh. 5 - LO 1, 2, 3 (Learning Objectives 1, 2, 3: Apply...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5; Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP for...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 6 (Learning Objective 6: Apply GAAP for notes...Ch. 5 - Prob. 5.23AECh. 5 - Prob. 5.24AECh. 5 - Prob. 5.25BECh. 5 - Prob. 5.26BECh. 5 - Prob. 5.27BECh. 5 - LO 1, 2, 3 (Learning Objectives 1, 2, 3: Apply...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP for...Ch. 5 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 5 (Learning Objective 5: Apply GAAP to...Ch. 5 - LO 6 (Learning Objective 6: Apply GAAP for notes...Ch. 5 - Prob. 5.35BECh. 5 - Prob. 5.36BECh. 5 - Fairmont Company has shipped goods to Willowbook...Ch. 5 - Prob. 5.38QCh. 5 - Prob. 5.39QCh. 5 - On April 3, a customer returned 600 of merchandise...Ch. 5 - Maple Grove Legal Association performs legal...Ch. 5 - Under the allowance method for uncollectible...Ch. 5 - Prob. 5.43QCh. 5 - Refer to Q5-43. The net receivables on the balance...Ch. 5 - Prob. 5.45QCh. 5 - Prob. 5.46QCh. 5 - Prob. 5.47QCh. 5 - Questions 5-48 through 5-51 use the following...Ch. 5 - Prob. 5.49QCh. 5 - Prob. 5.50QCh. 5 - Prob. 5.51QCh. 5 - Prob. 5.52QCh. 5 - A company with net credit sales of 960,000,...Ch. 5 - A company sells on credit terms of 2/10, n/30 and...Ch. 5 - (Learning Objectives 1, 2: Apply GAAP for proper...Ch. 5 - (Learning Objectives 1, 3: Apply GAAP for proper...Ch. 5 - (Learning Objectives 1, 4, 5, 6: Apply GAAP for...Ch. 5 - (Learning Objective 5: Apply GAAP for...Ch. 5 - (Learning Objectives 5, 7: Apply GAAP for...Ch. 5 - (Learning Objective 6: Apply GAAP for notes...Ch. 5 - Prob. 5.61APCh. 5 - (Learning Objectives 1, 2, 3, 4, 5: Apply GAAP for...Ch. 5 - (Learning Objectives 1, 2: Apply GAAP for proper...Ch. 5 - Prob. 5.64BPCh. 5 - Prob. 5.65BPCh. 5 - (Learning Objective 5: Apply GAAP for...Ch. 5 - Prob. 5.67BPCh. 5 - Prob. 5.68BPCh. 5 - (Learning Objectives 1, 7: Show how to speed up...Ch. 5 - (Learning Objectives 1, 2, 3, 4, 5: Apply GAAP for...Ch. 5 - Prob. 5.71CEPCh. 5 - Prob. 5.72CEPCh. 5 - Prob. 5.73CEPCh. 5 - Prob. 5.74SCCh. 5 - Prob. 5.75DCCh. 5 - Prob. 5.76DCCh. 5 - Strasburg Loan Company is in the consumer loan...Ch. 5 - Prob. 1FFCh. 5 - Focus on Analysis Under Armour, Inc. LO 1, 4, 7...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The credit terms offered to a customer by a business firm were 2/10, n/30, which means the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date. the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date. two sales returns can be made within 10 days of the invoice date and no returns thereafter. the customer must pay the bill within 10 days.arrow_forwardA plumbing supply company has a discount policy which states that, if a customer pays within 15 days of the invoice, the customer can take a 3% discount; otherwise, the full amount is due in 60 days from the date of the invoice. Which of the following notations are used in business to reflect this discount? A. 3/15,n/60 B. 3/60,15/n C. 15/3,60/n D. 3/n,15/60arrow_forwardYou receive an invoice for $17,400 with terms of 3/15, n/60. The supplier has a policy of allowing a cash discount for partial payments and you pay $8,000 within the discount period. Calculate the amount of credit you will receive for this payment.arrow_forward
- PLEASE SHOW ALL WORK 6. You receive an invoice for $18,300 with terms of 5/15, n/60. If the supplier has a policy of allowing a cash discount for partial payments and you pay $11,500 within the discount period, calculate the amount of credit you will receive for this payment.Amount credited = Amount paidComplement of cash discount rate = $11,500 7. For terms of 8/10, n/60 determine the annual rate you, in effect, pay the supplier if you fail to pay the invoice at the end of the discount period. Express the rate with 2 decimal places. 8. An invoice for $75.20 has terms of 3/10, 1/30, n/60. If you make payment 25 days after the invoice date, what amount should you pay? 9. You purchase goods on an invoice dated July 5 with terms of 4/15, n/45 ROG. If you receive the goods on July 23, calculate(a) the last day of the discount period, and (b) the last day of the credit period.b. Last day of credit period:arrow_forwardThe credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.4% of the average daily balance. Calculate parts a-d using the statement in the popup. E Click the icon to view the credit card statement. a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is $O. (Round to the nearest cent as needed.) Credit card statement Transaction Description Previous balance, $2647.59 Transaction Amount June 1 Billing date Payment Charge: Gas Charge: Groceries Charge: Gas Charge: Groceries Charge: Clothing June 30 End of billing period Payment Due Date: July 9 $1200.00 credit $34.38 $136.53 $41.64 $127.54 $215.18 June 6 June 8 June 9 June 17 June 27arrow_forward(Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Cash discount 1.6% 2.3% 2.4% 1.3% Cash discount period 12 days 8 days 7 days 10 days Credit period 30 days 35 days 30 days 55 days Beginning of credit period date of invoice end of month date of invoice end of montharrow_forward
- Which of the following terms of trade credit is the more expensive? a. A 3 percent cash discount if paid on the 15th day with bill due on the 45th day (3/15, net 45) b. A 2 percent cash discount if paid on the 10th day with the bill due on the 30th day (2/10, net 30)arrow_forwardThe credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.5% of the average daily balance. Calculate parts a-d using the statement in the popup. Click the icon to view the credit card statement. a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is $ (Round to the nearest cent as needed.) b. Find the interest to be paid on July 1, the next billing date. Round to the nearest cent. The interest to be paid on July 1 is $ (Use the answer from part a to find this answer. Round to the nearest cent as needed.) c. Find the balance due on July 1. The balance due on July 1 is $. (Use the answer from part b to find this answer.) 1 of the balance due at the end of the billing period, rounded up to 25 d. This credit card requires a $30 minimum monthly payment if the balance due at the end of the billing period is less…arrow_forwardAmerican Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 12.50%, with interest paid monthly, what is the card's EFF%? Select the correct answer. a. 17.24% b. 15.24% c. 19.24% d. 13.24% e. 11.24%arrow_forward
- The credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.2% of the average daily balance. Calculate parts a-d using the statement in the 'dndod Click the icon to view the credit card statement. a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is $. (Round to the nearest cent as needed.) b. Find the interest to be paid on July 1, the next billing date. Round to the nearest cent. The interest to be paid on July 1 is $ . (Use the answer from part a to find this answer. Round to the nearest cent as needed.) c. Find the balance due on July 1. The balance due on July 1 is $ . (Use the answer from part b to find this answer.) d. This credit card requires a $30 minimum monthly payment if the balance due at the end of the billing period is less than $400. Otherwise, the minimum monthly payment is 1 of the…arrow_forwardCredit Card Statement Transaction Description Previous balance, $2645.38 June 1 Billing date June 6 June 8 June 9 June 17 June 27 June 30 Payment Charge: Gas Charge: Groceries Charge: Gas Charge: Groceries Charge: Clothing End of billing period Payment Due Date: July 9 Transaction Amount $1300.00 credit $35.02 $137.66 $41.69 $125.66 $215.47arrow_forwardThe credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.4% of the average daily balance. Calculate parts a-d using the statement in the popup. E Click the icon to view the credit card statement. ..... a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is $. (Round to the nearest cent as needed.) Credit card statement Transaction Description Previous balance, $2647.59 Billing date Payment Transaction Amount June 1 June 6 Charge: Gas Charge: Groceries Charge: Gas Charge: Groceries Charge: Clothing End of billing period $1200.00 credit $34.38 $136.53 $41.64 $127.54 $215.18 June 8 June 9 June 17 June 27 June 30 Payment Due Date: July 9arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College