Jinks Corp. offers a 10% quantity discount to customers who purchase
10 or more of the same product. Also, Jinks offers credit terms of
2/10, n/30 to credit customers. Hayes Corp. purchased 10 office
chairs with a list price of $150 each on July 5, 1995. Answer the
following questions based on this information.
1. If Hayes pays the invoice for its purchase on July 15, 1995, what
amount of cash must be remitted to Jinks?
2. If Hayes pays the invoice on July 31, 1995, Jinks will record a sales
a. $ -0-
b. $ 30
c. $ 27
3. Which of the following accounts is NOT used with the GROSS method of
a. Sales Discounts
c. Accounts Receivable
d. Sales Discounts Lost
For the following set of questions, use the information below from the
Perry Co. 1995 income statement:
Inventory, January 1, 1995 16,500
Inventory, December 31, 1995 18,800
Purchase Returns & Allowances 1,400
4. The amount that Perry would report as Cost of Goods Purchased in its
1995 income statement is:
5. An inventory count at the end of the accounting period should be made
a. only the periodic inventory system.
b. only the perpetual inventory system.
c. both the periodic and perpetual inventory systems.
d. neither the periodic nor perpetual inventory systems.
6. Which of...