# Quiz 7: Discounts: Trade and Cash

Business

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Q 11Q 11

A radio with a net price of $700 and a trade discount rate of 30% has a list price of $1,000.

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True False

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Q 17Q 17

A net price equivalent rate of .74225 means that for each $10 the buyer's cost will be approximately 74 cents.

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True False

Q 18Q 18

The single equivalent discount rate is found by taking the net price equivalent rate and adding it to 1.

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True False

Q 19Q 19

A single equivalent discount rate of .45975 means the buyer saves approximately 46 cents per $1 of list price.

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True False

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True False

Q 24Q 24

A cash discount is a reduction from the gross amount of the invoice if payment is made within the discount period.

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True False

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Q 32Q 32

Goods sold after the 25

^{th}of the month with terms of 2/10, EOM results in the discount period being extended 10 days longer.Free

True False

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True False

Q 34Q 34

The actual credit one receives in making a partial payment is calculated by taking the partial payment and dividing by (1 + the discount rate).

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True False

Q 35Q 35

Amount of trade discount equals:
A)List price × trade discount rate
B)List price + trade discount rate
C)List price divided by trade discount rate
D)Net price × trade discount rate
E)None of these

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Multiple Choice

Q 36Q 36

Which of the following is usually not true about customer catalogs?
A)Contain list price
B)Completely updated once a year with a new revised catalog
C)Updated by discount sheets
D)Trade discount amounts will differ from product to product
E)None of these

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Multiple Choice

Q 37Q 37

Amount of trade discount is represented by the:
A)Base
B)Rate
C)Portion
D)Base divided by rate
E)None of these

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Multiple Choice

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Multiple Choice

Q 39Q 39

If the net price of a stove is $900 and the trade discount rate is 40%, the list price is:
A)$3,600
B)$2,250
C)$1,500
D)$1,260
E)None of these

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Multiple Choice

Q 40Q 40

The net price equivalent rate of 9/15/18 is:
A).36573
B).63573
C).36427
D).63427
E)None of these

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Multiple Choice

Q 41Q 41

The single equivalent discount rate of the trade discount 5/4/1 is:
A).09712
B).90288
C).00002
D).99998
E)None of these

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Multiple Choice

Q 42Q 42

The credit period is:
A)Always shorter than the discount period
B)Always 30 days from end of discount
C)Always twice the length of discount period
D)Long enough so buyers can always take a cash discount
E)None of these

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Multiple Choice

Q 43Q 43

Cash discounts are:
A)Always calculated on list price
B)Sometimes calculated with freight
C)Sometimes calculated with returned goods
D)Never calculated on freight and returns
E)None of these

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Multiple Choice

Q 44Q 44

FOB shipping point means:
A)Seller pays the cost of freight
B)Buyer pays the cost of freight
C)Title to goods shifts to buyer while being shipped
D)Seller cannot pay cost of freight
E)None of these

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Multiple Choice

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Multiple Choice

Q 46Q 46

With terms of 2/10, n/30:
A)Credit period is 10 days from date of invoice
B)Credit period is 40 days
C)Credit period extends into first 10 days of next month
D)Credit period is 30 days from date of invoice
E)None of these

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Multiple Choice

Q 47Q 47

An invoice dated March 6 with terms of 1/10, EOM results in the end of the discount period on:
A)May 10
B)April 10
C)May 30
D)May 31
E)None of these

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Multiple Choice

Q 48Q 48

Roland Corporation buys stoves from a wholesaler. The list price of a stove is $900, with a trade discount of 30%. The net price is:
A)$270
B)$1,170
C)$630
D)$360
E)None of these

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Multiple Choice

Q 49Q 49

A local college bookstore paid a net price of $12,500 for textbooks for the coming semester. The publisher offered a trade discount of 20%. The publisher's original list price was:
A)$15,000
B)$15,500
C)$15,625
D)$2,500
E)None of these

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Multiple Choice

Q 50Q 50

A local RadioShack store wants to buy a new line of plasma TVs. Manufacturer A offers chain discounts of 18/12, and Manufacturer B offers terms of 17/13. The single equivalent discount rate of ? is the best deal.
A).7221: Manufacturer A
B).7216: Manufacturer B
C).2779: Manufacturer A
D).2784: Manufacturer A
E)None of these

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Multiple Choice

Q 51Q 51

Joanne's Dress Shop received an invoice dated July 25 for $1,400, with terms of 2/10, 1/15, n/60. On August 8, Joanne's Dress Shop sent a partial payment of $750. The actual amount that should be credited is:
A)$765.31
B)$765.30
C)$757.58
D)$757.59
E)None of these

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Multiple Choice

Q 52Q 52

An invoice dated 5/19/xx received by Jones Supply indicated a balance of $17,000. This balance included a freight charge of $1,000. Terms of the bill were 5/10, 4/30, n/60. Assuming Jones pays off the bill on June 4, he pays:
A)$16,762.27
B)$16,000.55
C)$15,762.72
D)$16,000.84
E)None of these

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Multiple Choice

Q 53Q 53

Black & Decker Manufacturing sold a set of saws to True Value Hardware. The list price was $3,800. Black & Decker offered a chain discount of 8/3/1. The net price of the saws is:
A)$3,537.12
B)$3,537.21
C)$3,391.12
D)$3,357.21
E)None of these

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Multiple Choice

Q 54Q 54

J.C. Penney of Boston sold office equipment for $12,000 to Lee's of San Diego. Terms of the sale are 3/10, n/30 FOB Boston. J.C. Penney has agreed to prepay freight $300. Assuming Lee's pays within the discount period, how much will Lee's pay J.C. Penney?
A)$11,640
B)$8,544
C)$8,644
D)$11,940
E)None of these

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Multiple Choice

Q 55Q 55

A manufacturer of skis offered chain discounts of 10/5/4 to many of its customers. Joe Jones ordered skis that had a total list price of $149,500. The amount of the trade discount is:
A)$122,709.60
B)$26,970.40
C)$26,790.40
D)$122,907.69
E)None of these

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Multiple Choice

Q 56Q 56

A bedroom set lists for $12,000 and carries a trade discount of 30%. Freight (FOB shipping point) of $150 is not part of list price. Calculate the delivered price of the bedroom set including the freight. Assume a cash discount of 2%.
A)$8,232
B)$8,382
C)$8,385
D)$8,832
E)None of these

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Multiple Choice

Q 57Q 57

An invoice dated March 12 in the amount of $50,000 is received by Reliance Corporation on March 16. Cash discount terms on the invoice are 3/10, n/30. On March 16 Reliance mails a check in the amount of $8,000 as partial payment on the invoice. The outstanding balance owed on the invoice is:
A)$8,247.42
B)$41,752.58
C)$8,240.00
D)$41,760.00
E)None of these

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Multiple Choice

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Multiple Choice

Q 59Q 59

The net price equivalent rate of 3/7/13 is:
A).0273
B).784827
C).488173
D)215173
E)None of these

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Multiple Choice

Q 60Q 60

Brenda purchased a total of five computers for $3,300. She received a 20% trade discount. What did Brenda pay for the computers?
A)$2,640
B)$2,460
C)$2,440
D)$3,750
E)None of these

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Multiple Choice

Q 61Q 61

Walgreens is offered a chain discount on cosmetics from Libby Corp. of 8/5/2; Roma Company offers a chain discount of 7/6/4. What is the highest discount offered?
A).14348
B).839232
C).85652
D).160768
E)None of these

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Multiple Choice

Q 62Q 62

Brooks Brothers bought a suit that has a list price of $1,219, with a chain discount of 7/4/2. What is the net price of the suit?
A)$682.64
B)$1,166.65
C)$1,066.56
D)$152.44
E)None of these

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Multiple Choice

Q 63Q 63

Pete's appliance received a bill dated July 15 for $26,000 with terms of 2/10, 1/15, n/60. On July 27 Pete sent in a partial payment of $6,000. What is the amount credited as well as the balance due?

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Essay

Q 64Q 64

Morgan Company received from Lee Company an invoice dated September 27. Terms were 2/10 EOM. List price on the invoice was $5,000 (freight not included). Morgan receives a 9/7 chain discount. Freight charges are Morgan's responsibility, but Lee agreed to prepay the $150 freight charge. Morgan pays the invoice on November 9. What does Morgan pay Lee?

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Essay

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Q 66Q 66

If a manufacturer's list price is $800 and Bill's Outlet buys the goods for $650, what is the trade discount percent? (Round answer to the nearest hundredth percent.)

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Q 67Q 67

Marvin Gate bought some fencing from a wholesaler for $6,000. The wholesaler offered a trade discount of 35%. What was the original price? (Round to the nearest cent.)

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Q 68Q 68

Bloomberg's is offered the following chain discount(s); what is the lowest net price equivalent rate it will pay?

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Essay