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Problem 1: Which of the following statements regarding cash purchase discounts from suppliers is/are correct? (1) They are reductions in the retail prices by the sellers (2) They are revenues to the entity. (3) The cash account is debited when it is received by the entity.
a. (2) only
b. (1) and (2) only
c.(3) only
d.(1)and 3) only
Problem 2: When a seller of merchandise allowed a customer a reduction from the original price for defective goods, the seller will issue to the customer a
a. credit memorandum.
b. official receipt.
c. sales invoice.
d. debit memorandum.
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