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Unformatted text preview: Libby/Libby/Short 6e Chapter 6 Multiple-Choice Quizzes 1 Credit card discounts are reported on the income statement as: A) a contra revenue. B) a contra asset. C) a selling expense. D) both (A) and (C). Answer A 2 You received an invoice that shows credit terms of 2/10, n/60. What does the number 10 in the credit terms refer to? A) the number of days in the credit period. B) the amount of sales discount available. C) the number of days in the discount period. D) the amount of the trade discount. Answer C 3 A customer used a credit card to pay for $400 of services. The credit card company charged 2.5% for its services. How much did the company record as a deposit to its checking account as result of the sales transaction? A) $400.00 B) $410.00 C) $390.00 D) $388.00 Answer C 4 A customer, who is given credit terms of 2/10, n/60, purchased goods with a retail price of $600. The amount A customer, who is given credit terms of 2/10, n/60, purchased goods with a retail price of $600....
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- Spring '07
- bank balance, book balance, appropriate journal entry