Q1) Collected a payment from a customer who purchased on account, with terms net 30. The journal entry will include:

A. a credit to Revenue.

B. a credit to an asset account.

C. a credit to Sales Discounts account.

D. a credit to a liability account.

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Q2) The collection on account within the 1/10, n/30 discount period was recorded using a 10% discount rather than a 1% discount in both the controlling and subsidiary accounts. This error will cause:

A. the net income for the period to be understated.

B. the controlling account to not agree with the subsidiary ledger.

C. the net income for the period to be overstated.

D. the assets to be overstated.

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The discount period is longer than the credit period.

A. True

B. False