Questions:
1. Which of the following accounts are closed to the owner's capital account?
a. revenues and expenses
b. the owner's withdrawal account and expenses
c. income summary and owner's withdrawal account
d. revenues, expenses and the owner's withdrawal account
2. Credit terms of 1/10, n/30 indicates that the buyer is:
a. allowed to a 10% discount if payment is made within 30 days
b. allowed a 1% discount if payment is made within 10 days
c. allowed a 1% discount if payment is made within 30 days
d. allowed a 30% discount if payment is made within 10 days
3. A company makes a purchase of $2,000 of inventory, subject to credit terms of 3/10, n/45 and returns $500 of inventory prior to payment. What is the amount of the payment assuming payment is made within the discount period?
a. $1,500
b. $1,455
c. $1,440
d. $1,560
4. The buyer is responsible for the shipping costs when the shipping terms are:
a. FOB destination
b. COD destination
c. FOB shipping point
d. COD shipping point