Receivables

Question 1

What type of discount is a trade discount?

Answer 1

Quantity

Question 2

What type of discount is a cash discount

Answer 2

Sales

Question 3

Name the two methods of recording receivables

Answer 3

1. Gross

2. Net

Question 4

Define Gross Method

Answer 4

records receivables at gross invoice price (before cash discount)

Question 5

Define Net Method

Answer 5

records receivables at the net invoice price (after cash discount)