Accounting Multiple Choice Question – 14 August 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting

Cash discount allowed (also known as settlement discount allowed) to a customer means that the customer is entitled to pay less than the full amount he owes…?

Select ONE answer:

  1. only if payment is made within an agreed time period.
  2. only if payment is made in cash, not by cheque.
  3. only if payment is made either in cash or by cheque.
  4. only if goods, or other items, are purchased for cash, not on credit.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. Correct
  2. Cash discount allowed to a customer means that the customer is entitled to pay less than the full amount he owes once payment is made within an agreed time period. Payment may be made in any form, for example, cash, cheque or credit transfer.
  3. As for answer 2 above.
  4. A cash discount is a reduction in the sum to be paid once payment is made within an agreed period. Obviously, if purchases are made for cash, that is, paid for immediately, payment is made on time. However, purchase invoices, arising from credit purchases, may also be paid on time.

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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