Professor Instruction: Encircle the correct answer. 1. A b. sale c. order b. cash discounted exchange for cash or a promise to pay. is a transfer of merchandise from one business or individual to another in a. purchases d. discount 2. When cash is immediately received as full payment for merchandise sold, it is called a. cash discount c. cash sales 3. A document issued by the seller when collection is made. a collection receipt 4. Price reductions granted to customers because of defects or other problems with the unreturned merchandise are called a, accounts receivable b. sales returns c. sales allowances d. sales discounts d. cash debit b. sales invoice d. check c. purchase order 5. Sales returns and allowances is a contra account of a. sales b. purchases c. allowances d. returns 6. The term when total amount due shall be paid within 30 days from the date of purchased. a. 3/10, n/30 b. 3/eom c. n/30 d. 3/10, 2/15, n/30 7. It means 20% trade discount, 3% cash discount if the account is paid within 10 days, net amount due shall be paid within 30 days. a. 3/10, 2/15, n 30 b. 1/30 c. 3/10, n/30 d. 20, 3/10, 1/30 8. It means 20% and 25% trade discount, 3% cash discount if the account is paid within 10 days, net amount due shall be paid within 30 days. a. 3/10, 2/15, n/30 b. n/30 d. 20 and 25, 3/10, n/30 c. 3/10, n/30 b. Freight-Out c. discounts 9. A term that the buyer bears the transportation cost. d. FOB shipping point a. Freight-In 10 A term that the seller bears the transportation cost. c. Freight prepaid d. Freight-out a. FOB destination b. Freight collect 11. A term that the shipping or forwarding company is going to collect the transportation cost to the buyer, though the seller bears the transportation cost. b. FOB shipping point freight prepaid d. FOB destination freight prepaid a. FOB shipping point freight collect c. FOB destination freight collect 305