Indicate whether each of the following statements is true or false.________ a) A cash discount is extended to reward the buyer for purchasing large quantities of goods.________ b) A purchase discount refers to a cash discount as seen from the seller's viewpoint.________ c) A sales discount refers to a cash discount as seen from the buyer's view.________ d) In a perpetual inventory system, a sales discount is recorded as a reduction of sales revenue.________ e) In a perpetual inventory system, a purchase discount is recorded as a reduction of merchandise inventory.
What will be an ideal response?
a) F b) F c) F (d) T (e) T
a) This is false. Cash discounts are extended by the seller to encourage early payment of a receivable.
b) This is false. Cash discounts are purchase discounts from the perspective of the buyer, not the seller.
c) This is false. Cash discounts are sales discounts from the perspective of the seller, not the buyer.
d) This is true. Sales discounts are recorded as a reduction to accounts receivable and a reduction to sales revenue.
e) This is true. A purchase discount reduces the cost of the inventory and the associated account payable on the balance sheet.
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Which of the following statements regarding the allowance method of accounting for uncollectible receivables is incorrect?
A) Bad debt expense is not estimated. B) The Allowance for Bad Debts is used to hold the pool of "unknown" uncollectible accounts. C) The business does not wait to see which customers will not pay when estimating the allowance for bad debts. D) The allowance method is based on the matching principle.
Research has found that the majority of face-to-face communication consists of ________ expressions.
A. verbal B. persuasive C. explicit D. nonverbal E. vocal
Why is public sector bargaining at a crossroads?
What will be an ideal response?
What are the main advantages of volume-based allocation methods compared to activity-based costing?
A. Volume-based methods are easier to use and less costly to implement and maintain. B. Volume-based methods are less accurate and easier to use. C. Volume-based methods are more accurate and allowed by GAAP. D. There are no advantages to using volume-based methods. E. Volume-based methods are harder to use and more costly to implement and maintain.