Mr. Write gives a cash discount of $40 to a customer. The discount is credited to the discounts allowed account.The effect of recording the discount in this way is that profit will be:
A: correct
B: overstated by $80
C: understated by $80
D: understated by $40
A: correct
B: overstated by $80
C: understated by $80
D: understated by $40
举一反三
- “4折”means_______ A: 40% discount B: 60% discount C: 60 discount D: 40 discount?xml:namespace>
- When a customer purchases merchandise inventory from a business organization, he may be given a discount, which is designed to induce prompt payment. Such a discount is called the . ( ) A: trade discount B: nominal discount C: enhancement discount D: cash discount
- Net assets A: Overstated by $90 B: Understated by $90 C: Overstated by $180 D: Understated by $180
- The cash discount is regarded as a purchases discount for the buyer.
- Stock purchased was debited incorrectly to the motor vehicles account. The effect on the profit and loss account would be ？ A: Asset unaffected B: Asset understated C: Profit unaffected D: Profit affected