A sales invoice included the following information merchandise price

Question 1
A sales invoice included the following information: merchandise price, $5,000; freight, $900; terms 1/10, n/eom, FOB shipping point. Assuming that a credit for merchandise returned of $700 is granted prior to payment and that the invoice is paid within the discount period, what is the amount of cash that should be received by the seller?
Answer

$5,157

$4,300

$4,257

$4,950

Question 2
Anthony Company sold Madison Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Anthony prepaid the $300 shipping charge. Which of the following entries does Anthony make to record this sale?

Answer

Accounts Receivable-Madison, debit $20,000; Sales, credit $20,000

Accounts Receivable-Madison, debit $20,000; Sales, credit $20,000, and
Accounts Receivable-Madison, debit $300; Cash, credit $300

Accounts Receivable-Madison, debit $20,500; Sales, credit $20,500

Accounts Receivable-Madison, debit $20,000; Sales, credit $20,000, and
Freight Out, debit $300; Cash, credit $300

Question 3
Cumberland Co. sells $1,200 of inventory to Hancock Co. for cash. Cumberland paid $850 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?

Answer
Cash $1,200 Dr, Merchandise Inventory $850 Cr

Cash $1,200 Dr, Sales $1,200 Cr, Cost of Merchandise Sold $850 Dr, Merchandise Inventory $850 Cr.

Cash $1,200 Dr, Sales $1,200 Cr

Accounts Receivable $1,200 Dr, Sales $1,200 Cr, Cost of Merchandise Sold $850 Dr, Merchandise Inventory $850 Cr.

Question 4
Discounts taken by a buyer because of early payment are recorded on the seller’s accounting records as
Answer

Purchases discount

Sales discount

Trade discount

Early payment discount

Question 5
Dorman Co. sold merchandise to Smith Co. on account, $18,000, terms 2/15, net 45. The cost of the merchandise sold is $15,500. Dorman Co. issued a credit memo for $1,750 for merchandise returned that originally cost $1,400. The Smith Co. paid the invoice within the discount period. What is amount of net sales from the above transactions?
Answer