CH 5 prechapter

______ ______ is the legal right to receive cash from a credit sale and represents an asset of the company.

accounts recievable

A partial adjustment to the amount owed by the customer for goods that were not returned, but did not fully meet the customer's expectations is referred to as a sales

allowence

Accounts receivable should be classified as a(n)

asset

When a business provides services to a customer, and the customer promises to pay later, this is referred to as

credit sales

Sales to customers in which the customers pay within 30 to 60 days are referred to as (Select all that apply.)

credit sales. sales on account.

A trade discount is a reduction from the list price, which is used to: (Select all that apply.)

-disguise real prices from competitors -give quantity discounts to customers -change prices without publishing a new catalog

Which of the following is a discount in the amount to be paid if the customer pays within a specified time period?

Sales discount

A trade discount is

a percentage reduction from list price

An informal credit arrangement with a customer for payment to be received after the sale is classified as a(n)

account receivable

A sales allowance ____ the amount owed by the customer for merchandise that is _____ by the customer.

decreases; retained

A cash discount representing a reduction in the amount to be paid by a credit customer if the customer pays within a specified period of time is also referred to as a(n) _______ discount

sales

When a customer returns a product for a refund, in which account is the entry recorded?

sales return

When merchandise is returned for a refund or for credit to be applied to other purchases, the situation is called a(n) ___________ _________

sales return

A company that expects that some of its customers will not pay the agreed upon sales price must utilize the

allowence method