Determine whether the statement is TRUE OR FALSE: 1) Purchase returns refer to merchandise a buyer...

 

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Determine whether the statement is TRUE OR FALSE: 1) Purchase returns refer to merchandise a buyer purchases but then returns to the seller. 2) Credit terms of 2/10, n/30 imply that the seller offers the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date. Otherwise, the full amount is due in 30 days. 3) Sellers always offer a discount to buyers for prompt payment toward purchases made on credit. 4) If a company sells merchandise with credit terms 2/10 n/60, the credit period is 10 days and the discount period is 60 days. 5) The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination. 6) If goods are shipped FOB destination, the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete until that point. 7) A buyer using a perpetual inventory system records the costs of shipping merchandise it purchases in a Delivery Expense account. 8) A buyer of $5,000 in merchandise inventory does not take advantage of a supplier's credit terms of 2/10, n/30, and instead pays the invoice in full at the end of 30 days. The buyer will pay $4,900. 9) Offering sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collections efforts. 10) Sales Discounts is added to the Sales account when computing a company's net sales. Determine whether the statement is TRUE OR FALSE: 1) Purchase returns refer to merchandise a buyer purchases but then returns to the seller. 2) Credit terms of 2/10, n/30 imply that the seller offers the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date. Otherwise, the full amount is due in 30 days. 3) Sellers always offer a discount to buyers for prompt payment toward purchases made on credit. 4) If a company sells merchandise with credit terms 2/10 n/60, the credit period is 10 days and the discount period is 60 days. 5) The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination. 6) If goods are shipped FOB destination, the seller does not record revenue from the sale until the goods arrive at their destination because the transaction is not complete until that point. 7) A buyer using a perpetual inventory system records the costs of shipping merchandise it purchases in a Delivery Expense account. 8) A buyer of $5,000 in merchandise inventory does not take advantage of a supplier's credit terms of 2/10, n/30, and instead pays the invoice in full at the end of 30 days. The buyer will pay $4,900. 9) Offering sales discounts on credit sales can benefit a seller by decreasing the delay in receiving cash and reducing future collections efforts. 10) Sales Discounts is added to the Sales account when computing a company's net sales.

Answer rating: 100% (QA)

1TRUE Purchase returns refer to merchandise a buyer purchases but then returns to the seller This is typically because the buyer was not satisfied wit... View the full answer