Accounting Multiple Choice Question – 15 August 2019

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

Cash discount (also known as settlement discount) received is…?

Select ONE answer:

  1. deducted from the amount payable by debtors when money is received from them.
  2. given by a firm to its customers when it sells goods on credit.
  3. deducted by a firm when it pays its creditors.
  4. None of the above.

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 3

  1. Any amount of discount deducted from the amount payable by debtors when money is received from them is cash discount allowed.
  2. Discount given by a firm to its customers at the time of sale is a trade discount. A cash discount is allowed at the time of payment.
  3. Correct
  4. Not correct

 

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