AICE Accounting Ch. 2

John wants to buy a car but he doesn't want to pay any money at the time of the purchase. What type of financial transaction is he looking for?

• He pays with his Credit Card

• He pays immediately

• He pays in cash

• He opts for a Credit transaction

A financial transaction where no money changes hands at the time of the transaction

• Credit Card Payment

• Immediate payment
• Cash transaction
• Credit transaction

A customer that owes the business money

• Is called a trade receivable

• Is called a creditor
• Is called a trade payable

• Is called an investor

A supplier whom the business owes money

• A trade debtor

• A trade payable

• An trade receivable

• A shareholder

A reduction in the selling price of goods made by one trader to another

• Trade Discount

• Profit
• Loss
• Investment

Answer explanation

An allowance given by a seller to a customer to encourage the customer to pay an invoice before its due date for payment

• Cash Discount

• Late Payment Penalty
• Invoice Adjustment
• Credit Note

Discounts allowed to the customer of goods for prompt payment

• Loyalty discount

• Bulk purchase discount
• Discounts allowed

• Seasonal discount

Cash discounts received from the supplier of goods for prompt payment

• Discounts Received

• Additional charge for late payment
• Bonus for bulk purchase
• Rebate for returning goods

John is managing his company's finances. Which of the following transactions is most likely to require a credit entry in the company's bank account?

• John's company made a cash sale

• John's company received a cash discount

• A customer made a payment to John's company

• John's company made a payment to a supplier

Which of the following transactions is most likely to require a credit entry in the bank account?

• Cash Sales

• Cash Discount

• Payment made by customer

• Payment made to a supplier