Question 1

Cash discounts are:

Accepted Answer

A)  Always calculated on list price
B)  Sometimes calculated with freight
C)  Sometimes calculated with returned goods
D)  Never calculated on freight and returns
E)  None of theseF) B) and E)
G) A) and E)

Question 2

Amount of trade discount is represented by the:

Accepted Answer

A)  Base
B)  Rate
C)  Portion
D)  Base divided by rate
E)  None of theseF) None of the above
G) B) and C)

Question 3

A manufacturer of skis offered chain discounts of 10/5/4 to many of its customers. Joe Jones ordered skis that had a total list price of $149,500. The amount of the trade discount is:

Accepted Answer

A)  $122,709.60
B)  $26,970.40
C)  $26,790.40
D)  $122,907.69
E)  None of theseF) A) and C)
G) A) and B)

Question 4

Net price times single equivalent discount rate equals amount of trade discount.

Accepted Answer

A) True 
 B)False

Question 5

The trade discount results if the customer pays the bill within the discount period.

Accepted Answer

A) True 
 B)False

Question 6

A local college bookstore paid a net price of $12,500 for textbooks for the coming semester. The publisher offered a trade discount of 20%. The publisher's original list price was:

Accepted Answer

A)  $15,000
B)  $15,500
C)  $15,625
D)  $2,500
E)  None of theseF) A) and B)
G) B) and E)

Question 7

If the net price of a stove is $900 and the trade discount rate is 40%, the list price is:

Accepted Answer

A)  $3,600
B)  $2,250
C)  $1,500
D)  $1,260
E)  None of theseF) D) and E)
G) A) and C)

Question 8

Cash discounts are not taken on freight or returned goods.

Accepted Answer

A) True 
 B)False

Question 9

Roland Corporation buys stoves from a wholesaler. The list price of a stove is $900, with a trade discount of 30%. The net price is:

Accepted Answer

A)  $270
B)  $1,170
C)  $630
D)  $360
E)  None of theseF) A) and B)
G) C) and D)

Question 10

Joanne's Dress Shop received an invoice dated July 25 for $1,400, with terms of 2/10, 1/15, n/60. On August 8, Joanne's Dress Shop sent a partial payment of $750. The actual amount that should be credited is:

Accepted Answer

A)  $765.31
B)  $765.30
C)  $757.58
D)  $757.59
E)  None of theseF) A) and D)
G) A) and E)

Question 11

The complement of 10% is 90%, or in decimal .90.

Accepted Answer

A) True 
 B)False

Question 12

Knuckles on your hand represent months with 30 days.

Accepted Answer

A) True 
 B)False

Question 13

A bedroom set lists for $12,000 and carries a trade discount of 30%. Freight (FOB shipping point)  of $150 is not part of list price. Calculate the delivered price of the bedroom set including the freight. Assume a cash discount of 2%.

Accepted Answer

A)  $8,232
B)  $8,382
C)  $8,385
D)  $8,832
E)  None of theseF) A) and B)
G) A) and C)

Question 14

Those making partial payments are not allowed to take a cash discount.

Accepted Answer

A) True 
 B)False

Question 15

Walgreens is offered a chain discount on cosmetics from Libby Corp. of 8/5/2; Roma Company offers a chain discount of 7/6/4. What is the highest discount offered?

Accepted Answer

A)  .14348
B)  .839232
C)  .85652
D)  .160768
E)  None of theseF) D) and E)
G) A) and B)

Question 16

The complement of 25% is 52%.

Accepted Answer

A) True 
 B)False

Question 17

The complement of 35% is:

Accepted Answer

A)  53%
B)  65%
C)  56%
D)  165%
E)  None of theseF) A) and D)
G) A) and E)

Question 18

Amounts of trade discounts are not fixed.

Accepted Answer

A) True 
 B)False

Question 19

A net price equivalent rate of .74225 means that for each $10 the buyer's cost will be approximately 74 cents.

Accepted Answer

A) True 
 B)False

Question 20

The single equivalent discount rate of 9/5/4 is .17008.

Accepted Answer

A) True 
 B)False

Exam 7: Discounts: Trade and Cash

A bedroom set lists for $12,000 and carries a trade discount of 30%. Freight (FOB shipping point) of $150 is not part of list price. Calculate the delivered price of the bedroom set including the freight. Assume a cash discount of 2%.

Correct AnswerverifiedShow Answer

Knuckles on your hand represent months with 30 days.

Correct AnswerverifiedShow Answer

Joanne's Dress Shop received an invoice dated July 25 for $1,400, with terms of 2/10, 1/15, n/60. On August 8, Joanne's Dress Shop sent a partial payment of $750. The actual amount that should be credited is:

Correct AnswerverifiedShow Answer

A local college bookstore paid a net price of $12,500 for textbooks for the coming semester. The publisher offered a trade discount of 20%. The publisher's original list price was:

Correct AnswerverifiedShow Answer

Cash discounts are not taken on freight or returned goods.

Correct AnswerverifiedShow Answer

The complement of 35% is:

Correct AnswerverifiedShow Answer

Cash discounts are:

Correct AnswerverifiedShow Answer

Amount of trade discount is represented by the:

Correct AnswerverifiedShow Answer

If the net price of a stove is $900 and the trade discount rate is 40%, the list price is:

Correct AnswerverifiedShow Answer

The complement of 25% is 52%.

Correct AnswerverifiedShow Answer

The complement of 10% is 90%, or in decimal .90.

Correct AnswerverifiedShow Answer

Walgreens is offered a chain discount on cosmetics from Libby Corp. of 8/5/2; Roma Company offers a chain discount of 7/6/4. What is the highest discount offered?

Correct AnswerverifiedShow Answer

A net price equivalent rate of .74225 means that for each $10 the buyer's cost will be approximately 74 cents.

Correct AnswerverifiedShow Answer

A manufacturer of skis offered chain discounts of 10/5/4 to many of its customers. Joe Jones ordered skis that had a total list price of $149,500. The amount of the trade discount is:

Correct AnswerverifiedShow Answer

Roland Corporation buys stoves from a wholesaler. The list price of a stove is $900, with a trade discount of 30%. The net price is:

Correct AnswerverifiedShow Answer

The trade discount results if the customer pays the bill within the discount period.

Correct AnswerverifiedShow Answer

Net price times single equivalent discount rate equals amount of trade discount.

Correct AnswerverifiedShow Answer

Amounts of trade discounts are not fixed.

Correct AnswerverifiedShow Answer

The single equivalent discount rate of 9/5/4 is .17008.

Correct AnswerverifiedShow Answer

Those making partial payments are not allowed to take a cash discount.

Correct AnswerverifiedShow Answer

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