Indicate Whether Each of the Following Statements Is True or False

question 80

Short Answer

Indicate whether each of the following statements is true or false.
_____ a)A cash discount is extended to reward the buyer for purchasing large quantities of goods.
_____ b)A purchase discount refers to a cash discount as seen from the seller's viewpoint.
_____ c)A sales discount refers to a cash discount as seen from the buyer's view.
_____ d)In a perpetual inventory system,a sales discount is recorded as a reduction of sales revenue.
_____ e)In a perpetual inventory system,a purchase discount is recorded as a reduction of merchandise inventory.

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Definitions:

Interest

A fee, usually charged for the use of money.

Check Register

A record of checks written, deposits made, and current balances within a checking account.

Deposits

Money placed into an account or given to a third party as a pledge for the fulfilment of an agreement.

Cash Balance

The amount of money in cash or cash equivalents that a company or individual has available at any given time.