Author: Anonymous

Under the net method, when a company uses a perpetual inventory system, an invoice for $2,000 with terms of 2/10, n/30 should be recorded with a debit to Merchandise Inventory and a credit to Accounts Payable of $2,000.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

A receivable is an amount due from another party.

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The amount of the cash paid on August 16 equals:

Internal control procedures for cash receipts do not require that:

Jax Recording Studio purchased $7,800 in electronic components from Music World. Jax signed a 60-day, 8% promissory note for $7,800. Music World’s journal entry to record the sales transaction is:

The formula for computing interest on a note is: Principal of the note × Annual interest rate × Time expressed in fraction of year.

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.

The maturity date of a note receivable: