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Multiple Choice Quiz 2
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1
Trade discounts and cash discounts are the same.
A)True
B)False
2
The amount of a trade discount can be found by multiplying the list price times the trade discount rate.
A)True
B)False
3
The net price equivalent rate should always be rounded
A)True
B)False
4
The single equivalent discount rate represents the amount spent per $1.
A)True
B)False
5
70 days from June 8 is August 17.
A)True
B)False
6
2/10, EOM means a 2 percent discount can always be taken within 10 days of the 3rd month.
A)True
B)False
7
The trade discount rate is represented by the:
A)Base
B)Rate
C)Portion divided by Base
D)Base divided by rate
E)None of the above
8
If the net price of an LCD television is $1,200 and the trade discount rate is 40 percent, the list price is:
A)$3,000
B)$2,500
C)$2,000
D)$1,500
9
The single equivalent discount rate of the trade discount 6/4/2 is:
A).115648
B).110000
C).884352
D).115548
E)None of the above
10
FOB shipping point is paid by the:
A)Seller
B)Both seller and buyer
C)Neither seller nor buyer
D)Buyer
E)None of the above
11
A 2/10, n/30 ROG is an example of:
A)Receipt of goods
B)Trade discount
C)Trade discounts
D)Extra dating
E)None of the above
12
An invoice dated April 27 with terms of 2/10, EOM. results in the end of the credit period on:
A)June 10
B)May 10
C)June 30
D)July 1
E)None of the above
13
Dot’s Dress Shop received an invoice dated August 18 for $6,000 with terms of 3/10/, 2/15, n/60. On September 2 Dot’s Dress Shop sent a partial payment of $4,500. The actual amount that should be credited is:
A)$6,122.45
B)$5,491.48
C)$4,591.84
D)$4,410
E)None of the above
14
A Tool Manufacturer sold a set of chainsaws to Lee Hardware. The list price was $2,900. Tool offered a chain discount of 7/6/3. The net price of the chainsaws is:
A)$2,459.12
B)$2,459.10
C)$440.88
D)$440.88
E)None of the above
15
A Lazy Boy recliner lists for $1,200 and carries a trade discount of 10 percent. Freight (FOB shipping point) of $75 is not part of the list price. The delivered price of the recliner including freight assuming a cash discount of 2 percent is:
A)$1,133.40
B)$1,133.04
C)$1,058.40
D)$1,085.04
E)None of the above





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