6. If a sales invoice shows credit terms of 2/10,n/30, the discount period is: a. 10 days. b. 2 days. c. 30 days. d. cannot be determined from the information given 7. The revenue recognition principle requires that sales revenues be recognized: a. When cash is received. b. when the merchandise is ordered. c. When the goods are transferred from the seller to the buyer. d. None of the above 8. Bryan Company purchased merchandise from Cates Company with freight terms of FOB shipping point. The freight costs will be paid by the a seller. b. buyer. c. transportation company. d. buyer and the seller. 9. Jake's Market recorded the following events involving a recent purchase of merchandise: Received goods for $20,000, terms 2/10, n/30. Returned $400 of the shipment for credit. Paid $100 freight on the shipment. Paid the invoice within the discount period. As a result of these events, the company's merchandise inventory a. increased by $19,208. b. increased by $19,700. c. increased by $19,306. d. increased by $19,308. 10. A credit sale of $800 is made on April 25, terms 2/10, n/30, on which a return of $50 is granted on April 28. What amount is received as payment in full on May 4? a5735 b. $784 c. $800 d $750 11. The collection of a $600 account within the 2 percent discount period will result in a a. debit to Sales Discounts for $12. b. debit to Accounts Receivable for $588. c. credit to Cash for $588. d. credit to Accounts Receivable for $588 12. A credit memorandum is prepared when a. an employee does a good job. b. goods are sold on credit. 2 c. goods that were sold on credit are returned. d. customers refuse to pay their accounts. 13. Monaco Limited has payables days of 24.22, inventory days of 7.68 and receivables days of 18.11. What is Monaco's cash conversion cycle? a -1.57 days b. 1.57 days c. 13.79 days d. 34.65 days