INSTRUCTIONS: Complete each ofthfollowing statements by wirting the appropriate

Question

INSTRUCTIONS: Complete each ofthfollowing statements by wirting the appropriate words in the Answers column. appropriate words in the Answers column. For Scoring Answers STATEMENTS 0. The account debited when a petty cash fund isestablished is Petty Cash 1-2. Merchandise with an invoice price of $12,700 was purchased S to terms of 2/10, n/30. In the following situations, what is the cost merchandise? 1. The invoice is paid within the discount period 2 2. The invoice is paid after the discount period has expired exceeds the amount of 3. If the amount of cash overages for a period 3. If the amount of cash overages tount Cash Short and Over wll cash shortages, the balance in the account be a (answer debit or credit) 3. continued

Explanation / Answer

STATEMENT ANSWERS 1) If thee invoice is paid within the discount period = Invoice value = 12700 Less : Discount of 2% = 254 Net Value 12446 Answer = 12446 2) If thee invoice is paid after the discount period = Invoice value = 12700 No Discount is eligible 0 Net Value 12700 3) If the amount of short coverage ; This is a situation where the physical balance in petty cash and actual cash is differ Credit

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