Question
25) Which of the following describes factoring? Paying invoices promptly in order to take advantage of a cash discount Selling accounts receivable Pledging accounts receivable
25)
Which of the following describes factoring?
Paying invoices promptly in order to take advantage of a cash discount | ||
Selling accounts receivable | ||
Pledging accounts receivable as collateral | ||
Paying off bonds prior to their maturity date. |
27)
2/15 net 45 (or 2/15, n/45) translates as:
15 percent cash discount if paid in 2 days, net 45-day credit period. | ||
45 percent of account due in 15 days, payment prior to day 15 receives a 2 percent discount. | ||
2 percent cash discount if paid prior to 15 days, if customer does not take a cash discount, the full balance is due in 45 days. | ||
2 percent of the balance is due in 15 days; the remaining balance is due in 45 days. |
28)
Zoro Inc. purchased a new machine on October 20, 2010 for $1,000,000 on credit. The supplier has offered Zoro terms of 2/10, n/45. Zoros bank is currently lending funds at 8 percent. IF Zoro pays this invoice within the DISCOUNT period, what is the exact amount they will pay the supplier?
$20,000 | ||
$920,000 | ||
$980,000 | ||
$1,000,000 | ||
$1,020,000
|
29)
Zoro Inc. purchased a new machine on October 20, 2010 for $1,000,000 on credit. The supplier has offered Zoro terms of 2/10, n/45. Zoros bank is currently lending funds at 8 percent. IF Zoro elects NOT to pay this invoice within the DISCOUNT period, what is the exact amount they should pay the supplier?
$20,000 | ||
$920,000 | ||
$980,000 | ||
$1,000,000 | ||
$1,020,000 |
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