Reference no: EM132740086

Problem 1: Bryan Fertilisers purchased inventory from Cates Company with freight terms of FOB destination. The freight costs will be paid by the

a. seller.

b. buyer.

c. transportation company.

d. buyer and the seller.

Problem 2: A credit note is used as documentation for a journal entry that requires a debit to

a. Sales and a credit to Cash.

b. Sales Returns and Allowances and a credit to Accounts Receivable.

c. Accounts Receivable and a credit to a contra revenue account.

d. Cash and a credit to Sales Returns and Allowances.

Problem 3: If a customer agrees to retain inventory that is defective because the seller is willing to reduce the selling price, this transaction is known as a sales

a. discount.

b. return.

c. contra asset.

d. allowance.