Which of the following statements correctly describes the effect of recording the collection of a $10,000 account receivable for which a 2% sales discount was recorded at the time of collection?
Current assets will remain the same.
Gross profit will decrease $200.
Accounts receivable will decrease $9,800.
Net sales will increase $9,800.

Which of the following correctly describes credit terms of 2/10, n/30?
A two percent discount for early payment is available if the invoice is paid before the tenth day of the month following the month the sale.
A two percent discount for early payment is available within ten days of the date of sale.
A ten percent discount for early payment is available if the invoice is paid within two days of the date of the invoice.
A two percent discount for early payment is available if the invoice is paid after the tenth day, but before the thirtieth day of the invoice date.
A company purchased goods on credit with credit terms of 3/15, n/45. Although the company does not have cash available to pay within the discount period, the manager of the company is considering borrowing money to take advantage of the discount. In order to make the appropriate decision, the manager computed the annual interest rate associated with the sales discount. Which of the following is the annual interest rate (rounded)? (Use 365 days a year.)
56%.
38%.
25%.
18%.
Oakwood Company had accounts receivable of $750,000 and an allowance for doubtful accounts of the $21,500 just prior to writing off as worthless an account receivable for Hyland Company of $5,000. The net realizable value of accounts receivable as shown by the accounting records before and after the write-off was as follows:

Option A
Option B
Option C
Option D

The Rye Corporation has provided the following information:

• Total sales were $1,200,000.
• Beginning net accounts receivable was $45,000.
• Ending net accounts receivable was $65,000.
• Sales returns and allowances totaled $100,000.

What was Rye’s receivable turnover ratio?
21.8
18.5
10.0
20.0
Which of the following is not a component of the gross profit calculation?
Cost of goods sold
Sales returns and allowances
Allowance for doubtful accounts
Credit card discounts