Reference no: EM133260592

1. If a company employs the gross method of recording accounts receivable from customers, then sales discounts taken should be reported as

a. a deduction from sales in the income statement.

b. an item of "other expense" in the income statement

c. a deduction from accounts receivable in determining the net realizable value of accounts receivable.

d . sales discounts forfeited in the cost of goods sold section of the income statement

2 AG Inc. made a $25,000 sale on account with the following terms: 1/15; n / 30 If the company uses the net method to record sales made on credit, how much should be recorded as revenue?

a. $24,500.

b. $24,750.

c. $25,000.

d. $25,250 C.

3. AG Inc. made a $25,000 sale on account with the following terms: 1/15, n / 30 If the company uses the gross method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?

a. Debit Accounts Receivable for $24,750.

b. Debit Accounts Receivable for $24,750 and Sales Discounts for $ 250.

c. Debit Accounts Receivable for $25,000.

d. Debit Accounts Receivable for $ 25,000 and Sales Discounts for $250.

4. AG Inc. made a $25,000 sale on account with the following terms: 2/10; n / 30 If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?

a. Debit Accounts Receivable for $24,500

b. Debit Accounts Receivable for $24,500 and Sales Discounts for $ 500.

c. Debit Accounts Receivable for $25,000

d. Debit Accounts Receivable for $25,000 and Sales Discounts for $500.

5 . Lankton Company has the following account balances at year-end: Accounts receivable $ 90,000 Allowance for doubtful accounts 4,800 Sales discounts 3,200 Lankton should report accounts receivable at a net amount of

a. $ 82,000

b. $ 85,200.

c. $ 86,800

d. $90,000