BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You need to enter a percentage rate in the terms of payment to calculate ____ Choose the correct answer.
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Credit amount
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Debit amount
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Invoice discount
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Cash discount
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Explanation:
Detailed explanation-1: -To calculate the cash discount, the formula uses the price and the rate. The formula reads: Cash Discount = Purchase Price x Discount Rate. For example, if the price of the product is $200 and the discount rate is 10%, then the cash discount would equal $20, which means the consumer saves $20.
Detailed explanation-2: -In accounting, there are two different ways that cash discounts can be recorded in the books: the net method and the gross method. The net method treats sales revenue as the net amount after the given discount, and any discounts that the buyer doesn’t take are recorded as interest revenue.
There is 1 question to complete.