1. If a company pays an invoice within the discount, what effect will this have on merchandise inventory?

a. no effect

b. increase merchandise inventory

c. decrease merchandise inventory

2. Compute the amount paid assuming the invoice is paid within discount period.

Inovice amount - $75,000

Terms - 1/10, n/30

3. If a company returns merchandise what effect will this have on merchandise inventory?

a. no effect

b. increase merchandise inventory

c. decrease merchandise inventory

4. Compute the amount paid assuming the invoice is not paid within discount period.

Invoice amount - $75,000

Terms - 1/10, n/30

5. What can a merchandiser do to decrease the amount it pays for its merchandise?

6. Use the following information to compute goods avaibale for sale, cost of goods sold, gross profit, and net income.

Beginning inventory - 5,000

Ending inventory - 1,700

Expenses - 1,450

Net purchases - 3,900

Net sales - 9,500