Question 1

A company provided care to a patient worth $1,200. Because the patient was over the age of 65, the company granted the patient a 20% discount and the customer paid the correct amount in cash. How would the company record the service transaction?

Transaction	Account Title	Debit	Credit
A.	Cash	960
A.	Service Revenue		960
B.	Cash	960
B.	Trade Discount	240
B.	Service Revenue		1,200
C.	Cash	1,200
C.	Service Revenue		1,200
D.	Cash	1,200
D.	Trade Discount		240
D.	Service Revenue		960

Multiple Choice

Option A

Option B

Option C

Option D

Question 2

Garber Plumbers offers a 20% trade discount when providing $2,000 or more of plumbing services to its customers. During March, Garber provided $4,000 of plumbing services to Red Oak, Incorporated and $1,500 of services to Cyril, Incorporated. Each of these customers was granted credit terms of 2/10, n/30. If both customers paid for the plumbing services within the discount period, what was the amount of net revenues for these two transactions?

Multiple Choice

$4,486

$4,606

$4,606

$5,500

$4,486

$4,312

Question 3

On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. How would Flores record the sale on November 10?

Transaction	Account Title	Debit	Credit
A.	Accounts Receivable	7,840
A.	Sales Revenue		7,840
B.	Accounts Receivable	8,000
B.	Sales Revenue		8,000
C.	Accounts Receivable	7,840
C.	Sales Discounts	160
C.	Sales Revenue		8,000
D.	Accounts Receivable	8,000
D.	Sales Discounts		160
D.	Sales Revenue		7,840

Multiple Choice

Option A

Option B

Option C

Option D