Test Bank For Contemporary Mathematics For Business and Consumers 8th Edition

Test Bank for Contemporary Mathematics for Business and Consumers, 8th Edition
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Business and Consumers, 8th Edition
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Name: Class: Date:
Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

1. Business documents used to keep track of sales and purchases are called ____________________.
ANSWER: invoices
2. Freight terms, FOB destination indicate that the ____________________ is responsible for the freight charges.
ANSWER: seller
3. Trade discounts are reductions from the manufacturer's suggested ____________________ price.
ANSWER: list
4. The ____________________ price of merchandise is calculated by subtracting the amount of trade discount from the
list price.
ANSWER: net
5. The net price factor, usually written in decimal form, is the ____________________ of the trade discount rate.
ANSWER: complement
6. The single equivalent discount is a single trade discount that equates to all the discounts in a(n)
____________________ or ____________________.
ANSWER: series, chain/chain, series
7. The ____________________ period is the time period that the seller allows the buyer to pay an invoice.
ANSWER: credit
8. The ____________________ period is the time period in which a buyer can take advantage of the cash discount.
ANSWER: cash discount
9. ____________________ dating is when the discount period and the credit period start on the date of the invoice.
ANSWER: Ordinary
10. When ____________________ dating is used, terms of sale begin on the date the goods are received by the buyer.
ANSWER: ROG
receipt of goods
11. What information does the following term or section of an invoice provide? "Seller's Invoice Number"
a. Date of payment and cash discount
b. Indicates what the merchandise is, including model numbers
c. Total owed on the purchase
d. Seller's record number of the transaction
ANSWER: d
12. What information does the following term or section of an invoice provide? "Shipped Via"
a. Price for each unit of merchandise
b. Name of freight company handling the shipment
c. Used in quoting shipping charges
d. Total amount of merchandise and all other charges
ANSWER: b
Copyright Cengage Learning. Powered by Cognero. Page 1

Name: Class: Date:

13. What information does the following term or section of an invoice provide: "F.O.B. destination"?
a. The buyer pays all transportation charges from the seller's location
b. The seller pays all transportation charges to the buyer's location
c. The freight charges are negotiable
d. The freight charges are not negotiable
ANSWER: b
14. Find the total for the invoice below:
Stock # Quantity Unit Description Unit Price Total

6729 20 ea. 15" Monitor $349.00
1259 22 ea. Cable 14.00
1152 25 ea. SCSI card 149.00
Invoice Subtotal
Shipping Charges $580.00
Invoice Total
a. $11,593.00
b. $1,092.00
c. $5,311.00
d. $10,848.00
ANSWER: a
15. Find the total for the invoice below:

424 26 ea. Sm. Shirts $21.50
501 23 ea. Md. Shirts 20.00
127 19 ea. Lg. Shirts 11.50
Invoice Subtotal
Invoice Total
a. $1,291.50
b. $1,237.50
c. $1,222.50
d. $1,070.00
ANSWER: a
16. Morgan bought the following: 27 Wren Houses @ $12.00, 31 Bluebird Houses @ $21.50, and 17 Bird Feeders @
$19.75. The shipping charges were $68.00. What was the total invoice charge?
a. $2,214.50
b. $1,587.50
c. $1,394.25
d. $1,590.00
ANSWER: c

Name: Class: Date:

17. A discount store purchased some special product at a list price of $ 6,300. If the broker gives a 30.5% trade discount
rate, what is the amount of the trade discount?
a. $1,921.50
b. $4,378.50
c. $2,950.00
d. $1,706.00
ANSWER: a
18. What is the amount of the trade discount on merchandise that a vendor can receive with a list price of $7,700 and a
trade discount rate of ?
a. $1,275.50
b. $5,760.00
c. $1,578.50
d. $2,500.25
ANSWER: c
19. What is the amount of the trade discount on goods ordered with a list price of $3,650 and a trade discount rate of
to the nearest cent?
a. $1,530.00
b. $1,640.00
c. $173.38
d. $160.25
ANSWER: c
20. Rave-Up Party Store buys some goods with a list price of $5,900. The supplier extends a trade discount rate.
What is the amount of the trade discount?
a. $2,675.50
b. $3,125.65
c. $1,103.75
d. $722.75
ANSWER: d
21. Calculate the net price of merchandise listing for $5,900 less a trade discount rate of 45%.
a. $2,655
b. $3,760
c. $3,245
d. $2,065
ANSWER: c
22. The Canine Shop orders special powders and oils with a list price of $1,500. The supplier extends a 4% trade discount
rate. What is the net price?
a. $1,400
Name: Class: Date:

b. $84
c. $1,440
d. $60
ANSWER: c
23. Calculate the net price of goods listing for $9,900 less a trade discount rate of to the nearest cent.
a. $9,664.87
b. $235.13
c. $725.68
d. $9,075.25
ANSWER: a
24. Bob's Motorcycle shop buys some seats and handle bars with a list price of $5,020. The supplier extends a 32% trade
discount rate. What is the net price?
a. $3,413.60
b. $1.606.40
c. $1,900.10
d. $3,200.60
ANSWER: a
25. What was the trade discount rate if items sold with a list price of $7,550 were sold at a net price of $5,220? (Round to
the nearest whole percent)
a. 31%
b. 65%
c. 35%
d. 58%
ANSWER: a
26. An electrical supply store bought copper wire with a list price of $26,200. The wholesaler extended a trade discount
which made the net price $15,206. What is the trade discount rate to the nearest whole percent?
a. 32%
b. 58%
c. 42%
d. 49%
ANSWER: c
27. What was the trade discount rate if goods with a list price of $10,600 were sold at a net price of $8,250? (Round to the
nearest tenth)
a. 79.1%
b. 22.2%
c. 36.4%
d. 28.3%
ANSWER: b
Name: Class: Date:

28. Flora's Flowers buys some pots and vases with a list price of $26,700. If the supplier offers a trade discount that yields
a net price of $12,955, what is the trade discount rate to the nearest tenth of a percent?
a. 45.1%
b. 49.5%
c. 59.6%
d. 51.5%
ANSWER: d
29. Dents and Dings Auto Body buys paint with a list price of $29,000. If the supplier extends trade discounts of 30/35/20,
what is the trade discount amount?
a. $10,566
b. $18,444
c. $17,600
d. $13,250
ANSWER: b
30. Calculate the trade discount amount of merchandise with a list price of $5,000 less trade discounts of 40/20/15.
a. $2,960
b. $2,040
c. $3,750
d. $1,250
ANSWER: a
31. Calculate the trade discount amount of goods with a list price of $29,000 less trade discounts of .
a. $7,752.25
b. $2,280.10
c. $13,072.82
d. $15,927.18
ANSWER: d
32. Anselmo’s Engineering buys circuit boards with a list price of $32,000. If the supplier extends trade discounts of
42/32/12, what is the trade discount amount?
a. $18,415.00
b. $15,170.00
c. $20,893.70
d. $16,835.25
ANSWER: c
33. A flower shop buys roses with a list price of $1,500. If the wholesaler offers trade discounts of , find the
trade discount amount to the nearest penny.
a. $759.67
b. $1,200.01

Name: Class: Date:

c. $912.25
d. $480.02
ANSWER: a
34. All-Ways Green Gardens buys plants with a list price of $15,000. If the supplier extends trade discounts of 20/15/1,
what is the trade discount amount?
a. $1,025.15
b. $4,902.00
c. $1,150.00
d. $3,750.25
ANSWER: b
35. Find the net price for an order of television sets with a list price of $16,000, less trade discounts of 35/20/15. Use the
net price, complement method for your answer.
a. $11,249
b. $7,072
c. $4,821
d. $8,928
ANSWER: b
36. Easy Patterns Fabric buys merchandise with a list price of $9,500. Use the net price, complement method to find the
net price if the wholesaler offers trade discounts of 25/10/5. (Round to the nearest penny)
a. $6,900.35
b. $5,622.03
c. $4,700.05
d. $6,091.88
ANSWER: d
37. Find the net price for a three piece set of coffee tables with a list price of $2,500, less trade discounts of 25/20/15. Use
the net price, complement method.
a. $1,225
b. $1,275
c. $1,500
d. $1,000
ANSWER: b
38. Find the net price for an order of tires with a list price of $15,000, less trade discounts of 30/25/10. Use the net price,
complement method.
a. $5,250.00
b. $9.750.00
c. $7,912.50
d. $7,087.50
ANSWER: d
39. McClan Paving buys asphalt with a list price of $17,000. If the supplier extends trade discounts of 42/22/11, find the
Name: Class: Date:

net price using the complement method.
a. $3,100.25
b. $6,844.20
c. $4,976.37
d. $,5900.25
ANSWER: b
40. Find the net price for an order of gift items with a list price $24,000 less trade discounts of 30/25/15. Use the net price,
complement method.
a. $18,400.00
b. $13,209.40
c. $7,200.00
d. $10,710.00
ANSWER: d
41. A craft shop buys stuffed animals with a list price of $8,000. If the wholesaler offers trade discounts of 25/25/25, find
the net price factor.
a. 0.45375
b. 0.21125
c. 0.78875
d. 0.42188
ANSWER: d
42. Find the trade discount amount for an order of merchandise with a list price of $25,000 less trade discounts of
30/25/10.
a. $11,812.50
b. $187.50
c. $13,187.50
d. $12,418.25
ANSWER: c
43. A discount clothing store buys shirts and slacks with a list price of $12,750. If the wholesaler offers trade discounts of
15/25/15, find the single equivalent discount.
a. 0.444375
b. 0.357896
c. 0.458125
d. 0.352852
ANSWER: c
44. Find the trade discount amount for an order of paper supplies with a list price of $25,000, less trade discounts of
30/20/10. Use the single equivalent discount for your answer.
a. $16,120
b. $11,250
c. $12,400

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d. $13,750
ANSWER: c
45. Atlas Hardware buys power tools with a list price of $29,500. If the supplier offers trade discounts of 10/20/5, find the
trade discount amount. Use the single equivalent discount for your answer.
a. $9,322
b. $13,100
c. $17,752
d. $5,700
ANSWER: a
46. A second hand furniture store buys sofas with a list price of $9,500. If the wholesaler offers trade discounts of
10/20/30, find the single equivalent discount.
a. 0.442
b. 0.496
c. 0.600
d. 0.320
ANSWER: b
47. Hard Blues Music buys CDs with a list price of $32,000. If the wholesaler offers trade discounts of 3/2/1, find the net
price factor.
a. 0.35005
b. 0.65021
c. 0.94109
d. 0.52484
ANSWER: c
48. Kiddie Kites buys Japanese kite kits with a list price of $6,500. If the supplier offers trade discounts of 30/15/15, find
the trade discount amount to the nearest cent.
a. $4,200.25
b. $1,207.50
c. $3,212.63
d. $2,295.87
ANSWER: c
49. Amado purchased the following: 15 mouse traps @ $1.25 per item, 18 light bulbs @ $3.50 per item and 3 Bird
Feeders @ $19.75. The shipping charges were $52.00. What was the total invoice charge?
a. $141.00
b. $193.00
c. $24.50
d. $22.96
ANSWER: b
50. A small retailer buys goods from a vendor with an invoice amount of $9,100. The terms of the sale are 2/10, n/30.
What is the net amount due on the goods if the bill is paid by the 10th day?
Name: Class: Date:

a. $182
b. $8,918
c. $8,640
d. $910
ANSWER: b
51. Modern Video buys Blu-ray discs with an invoice price of $30,200, and terms of sale of 2/15, n/30. What is the net
amount due on the order if the bill is paid by the 10th day?
a. $20,200
b. $29,088
c. $19,180
d. $29,596
ANSWER: d
52. Backyard World buys plastic pools from a supplier with an invoice amount of $19,500. The terms of the sale are 5/10,
n/30. If the retailer sends a partial payment of $8,700 on the discount date, what is the net amount still due?
a. $10,342.11
b. $10,365.00
c. $10,800.00
d. $9,135.00
ANSWER: a
53. Lulu's Bath Works purchases towels with an invoice price of $12,456, and terms of sale of 5/10, n/30. What is the net
amount due on the order if a partial payment of $2,500 is made on the 10th day?
a. $9,824.42
b. $9,956.00
c. $10,155.00
d. $2,631.59
ANSWER: a
54. Vivian's Linens purchases towels with an invoice price of $22,700, and terms of sale of 4/10, n/30. What is the net
amount due on the order if a partial payment of $10,300 is made on the 10th day?
a. $11,970.83
b. $12,365.47
c. $10,155.00
d. $11,988.00
ANSWER: a
55. Quick Depot buys tools from a supplier with an invoice amount of $19,700. The terms of the sale are 15/15, n/30.
What is the net amount due on the order if the bill is paid by the 15th day?
a. $18,245
b. $19,700
c. $16,745
d. $17,760

Name: Class: Date:

ANSWER: c
56. A farm feed supply firm buys feed with an invoice date of April 19. The terms of sale are 3/15, n/30. Find the discount
date.
a. April 22
b. June 18
c. April 29
d. May 4
ANSWER: d
57. Conan purchases chocolate having an invoice price of $23,700. The terms of sale are 20/11, n/30. What is the cash
discount if the bill is paid by the 10th day?
a. $4,740
b. $1,375
c. $11,644
d. $4,310
ANSWER: a
58. Standard Software purchases programs from Microsoft with an invoice price of $25,900 and terms of sale of 5/15,
n/30. What is the net amount due on the order if a partial payment of $6,000 is made on the 15th day?
a. $24,605.00
b. $20,200.00
c. $20,720.00
d. $19,584.21
ANSWER: d
59. The local zoo buys hay from a supplier with an invoice amount of $17,220. The terms of the sale are 5/22, n/30. What
is the net amount due on the order if the bill is paid by the 22nd day?
a. $17,220
b. $16,359
c. $861
d. $4,760
ANSWER: b
60. Find the net date for an invoice dated August 7, with terms 4/20, 50 Extra.
a. August 27
b. September 16
c. October 16
d. November 5
ANSWER: d
61. Luggage World buys briefcases with an invoice date of September 28. The terms of sale are 2/10 EOM. What is the
net date for this invoice?
a. October 10
b. October 30
Name: Class: Date:

c. November 10
d. November 30
ANSWER: d
62. Get-Down Electronics buys MP3 players with an invoice date of June 29 and terms of sale of 4/20 EOM. Calculate the
discount date.
a. June 29
b. July 18
c. August 20
d. August 30
ANSWER: c
63. A toy store buys Wiis from Nintendo with an invoice date of April 14. The terms of sale are 3/10 ROG. What is the
net date if the shipment arrives June 12?
a. April 24
b. May 14
c. June 22
d. July 12
ANSWER: d
64. Classic Furniture purchases dining room sets with an invoice date of September 27, and terms of sale of 3/10, n/60.
What is the net date?
a. October 17
b. October 22
c. November 26
d. November 2
ANSWER: c
65. A home accessories store buys lamps with a net price of $22,600. The terms of sale are 4/15, n/30. If a partial payment
of $10,300 is sent to the wholesaler on the discount date, what is the net amount still due?
a. $21,696.00
b. $11,870.83
c. $12,712.00
d. $11,808.00
ANSWER: b
66. A new business receives an invoice for merchandise on August 9. The terms of the sale are 12/10, n/30. If the manager
elects to take the cash discount, what is the discount date?
a. August 19
b. August 18
c. August 21
d. August 17
ANSWER: a
67. The Photo Express buys cameras and film with an invoice date of May 17. If the terms of sale are 2/15, n/45, find the
Name: Class: Date:

net date.
a. June 1
b. July 18
c. July 16
d. July 1
ANSWER: d
68. A manufacturer of computer printers offers a series discount of 20/10/5. A second manufacturer of printers offers a
series discount of 25/12/10. Assuming all other aspects of the products are the same, which manufacturer would offer the
best discount?
a. The 20/10/5 discount because it results in a final discount of 68.4%
b. The 20/10/5 discount because it results in a final discount of 31.6%
c. The 25/12/10 discount because it results in a final discount of 40.6%
d. The 25/12/10 discount because it results in a final discount of 59.4%
ANSWER: c
69. Hyabuza Japanese Restaurant received an invoice, dated February 20, 2011, for supplies they ordered that had a list
price of $2,700 from a supplier that offered a series discount of 15/8/4 and carried terms of 3/10, 1/15, n/30. How much
should the restaurant remit if the bill is to be paid in full on March 1, 2011?
a. $1,966.13
b. $2,006.67
c. $2,700.00
d. $2,026.94
ANSWER: a
70. Tamara Muldoon received an invoice dated October 25th with terms of 2/10, n/30 EOM. If Tamara wishes to pay the
bill on the last day of the discount period, what date would she pay the invoice?
a. December 10
b. November 30
c. November 4
d. November 10
ANSWER: d
71. Chuck's Chops, an up-scale steak house, received an invoice for 800 pounds of baking potatoes with a cost of $.85 per
pound. The terms were , n/30. Chuck was unable to pay the bill in full within the discount period but was able to
remit a partial payment of $425.00 within the discount period. How much credit did Chuck receive for his payment?
a. $425.00
b. $435.90
c. $429.25
d. None
ANSWER: b
72. Gadgets Inc., received an invoice from a supplier for raw materials that had a list price of $12,600.00. The supplier
offered a series discount of 30/20/10 and terms of 2/10, n/30 ROG and F.O.B. destination. The supplier pre-paid the
Name: Class: Date:

freight of $350.00. The invoice was dated June 10 and the goods were received on June 30. If Gadgets remitted full
payment on July 10, what was the amount they paid?
a. $6,566.39
b. $5,880.39
c. $6,223.39
d. $6,573.39
ANSWER: d
73. A discount store purchased some special product at a list price of $1,600. If the broker gives a 20.25% trade discount,
what is the amount of the trade discount?
a. $1,276.00
b. $324.00
c. $950.00
d. $1,706.00
ANSWER: b
74. Screws and Bolts Outlet buys a shipment of screws with a list price of $2,400. If the supplier extends trade discounts
of 20/25/10, what is the trade discount amount?
a. $480
b. $1,920
c. $1,104
d. $1,440
ANSWER: c
75. Awesome Software purchases programs from Apple Inc., with an invoice price of $14,900 and terms of sale of 3/15,
n/30. What is the net amount due on the order if a partial payment of $2,000 is made on the 15th day?
a. $12,900.00
b. $12,838.14
c. $2,061.85
d. $1,200.00
ANSWER: b
76. Dante's Wholesaler buys some goods with a list price of $4,400. The supplier extends a 10.25% trade discount to a
customer. What is the amount of the trade discount?
a. $535.00
b. $3,949.00
c. $451.00
d. $722.25
ANSWER: c
77. JoAnne's Fabric buys merchandise with a list price of $12,400. Use the complement method to find the net price if the
wholesaler offers trade discounts of 15/20/5. (Round to the nearest penny)
a. $10,540.00
b. $8,010.40
c. $4,389.60
Name: Class: Date:

d. $6,092.35
ANSWER: b
78. What word is represented by the abbreviation: pr

ANSWER: pair
79. What word is represented by the abbreviation: in.

ANSWER: inch
80. What word is represented by the abbreviation: cwt

ANSWER: 100 weight
81. What word is represented by the abbreviation: kg

ANSWER: kilogram
82. What word is represented by the abbreviation: pt

ANSWER: pint
83. What word is represented by the abbreviation: drm

ANSWER: drum
84. What word is represented by the abbreviation: oz

ANSWER: ounce
85. What word is represented by the abbreviation: dz

ANSWER: dozen
86. What word is represented by the abbreviation: gro

ANSWER: gross
87. What word is represented by the abbreviation: ea

ANSWER: each
88. What word is represented by the abbreviation: M

ANSWER: thousand items
89. What word is represented by the abbreviation: lbs

ANSWER: pounds
Narrative 7-1
Use the invoice below to identify the indicated parts:

Name: Class: Date:
90. Refer to Narrative 7-1. Use the invoice to identify the: Seller
ANSWER: FotoFair Corporation
91. Refer to Narrative 7-1. Use the invoice to identify the: Buyer
ANSWER: Shutterbug Camera Shops
92. Refer to Narrative 7-1. Use the invoice to identify the: Invoice number
ANSWER: 44929
93. Refer to Narrative 7-1. Use the invoice to identify the: Freight charges
ANSWER: $183.70
94. Refer to Narrative 7-1. Use the invoice to identify the: Terms of sale
ANSWER: Net − 30 days
95. Refer to Narrative 7-1. Use the invoice to identify the: Invoice date
ANSWER: November 27, 200X
Name: Class: Date:
96. Refer to Narrative 7-1. Use the invoice to identify the: Shipped via
ANSWER: Federal Express
97. Refer to Narrative 7-1. Use the invoice to identify the: F.O.B.
ANSWER: Knoxville, TN
98. Refer to Narrative 7-1. Use the invoice to identify the: Invoice subtotal
ANSWER: $9,117.50
99. Refer to Narrative 7-1. Use the invoice to identify the: Unit price − Model 75
ANSWER: $41.88
100. From the invoice, extend each line to the total column and calculate the invoice subtotal and total:
Stock # Quantity Unit Merchandise Unit Price Total

Description
2839 28 ea Staplers $9.20 $______
1612 15 ea 2-tier trays 3.19 ______
3218 2 gro #2 pencils 21.60 ______
3318 8 bx 3x5 index cards 5.26 ______
Invoice Subtotal ______
Shipping Charges 51.98
Invoice Total $______
ANSWER: $257.60
$47.85
$43.20
$42.08
$390.73 Invoice Subtotal
$442.71 Invoice Total
101. Calculate the trade discount and net price to the nearest cent:
List Price Trade Discount Rate Trade Discount Net Price
$860.00 22%
ANSWER: $189.20; $670.80
$415.00 40%
ANSWER: $166.00; $249.00
$86.72 12%
ANSWER: $10.41; $76.31
104. Calculate the net price factor and net price using the complement method, rounding to the nearest cent:
Name: Class: Date:
List Price Trade Discount Rate Net Price Factor Net Price
$8,299.00 28%
ANSWER: 0.72; $5,975.28
$315.00 32%
ANSWER: 0.68; $214.20
$1,046.20 16.6%
ANSWER: 0.834; $872.53
$18.36 8 5/8%
ANSWER: 0.91375; $16.78
108. Calculate the trade discount and trade discount rate (round answer to the nearest tenth percent):
List Price Trade Discount Trade Discount Rate Net Price
$3,240.00 $2,478.60
ANSWER: $761.40; 23.5%
$816.50 $667.90
ANSWER: $148.60; 18.2%

$3.98 $3.83
ANSWER: $0.15; 3.8%
111. Complete the table (round net price factor to four decimal places and single equivalent discounts to the nearest
hundredth percent):

Name: Class: Date:

List Trade Discount Net Price Single Equivalent Trade Net
Price Rates Factor Discount Discount Price
$829.00 15/10/5
ANSWER: 0.7268; 27.32%; $226.48; $602.52
hundredth percent):

$15,230.00 20/8/5
ANSWER: 0.6992; 30.08%; $4,581.18; $10,648.82
hundredth percent):

$416.18 30/10/10
ANSWER: 0.567; 43.3%; $180.21; $235.97
114. Calculate the cash discount and the net amount due, rounding to the nearest cent:
Amount of Invoice Terms of Sale Cash Discount Net Amount Due
$2,862.20 3/15, n/30
ANSWER: $85.87; $2,776.33
$186.25 2/10, n/45
ANSWER: $3.73; $182.52
$3,212.98 , n/60
ANSWER: $48.19; $3,164.79
117. Calculate the credit given for the partial payment and the net amount due on the invoice, rounding to the nearest cent:
Amount of Terms of Partial Credit for Partial Net Amount

Invoice Sale Payment Payment Due
$2,865.00 2/10, n/30 $1,500.00
ANSWER: $1,530.61; $1,334.39

Name: Class: Date:


$941.25 3/15, n/60 $500.00
ANSWER: $515.46; $425.79

$362.18 , n/45 200.00
ANSWER: $209.42; $152.76
120. Using the dating method, calculate the discount date and the net date. Unless otherwise specified, the net date is 20
days after the discount date:
Date of Invoice Terms of Sale Discount Date Net Date
December 10 2/10, n/30
ANSWER: December 20; January 9
April 6 2/10, EOM
ANSWER: May 10; May 30
June 28 3/15, EOM
ANSWER: August 15; September 4
October 15 3/20, ROG
Received Nov 25
ANSWER: December 15; January 4
July 20 2/10, 60 Extra
Name: Class: Date:

ANSWER: September 28; October 18
125. What information does the following term or section of an invoice provide?
"Terms"
ANSWER: Date of payment and cash discount
126. Find the total for the invoice below.

6839 20 ea. Power Saws $549.99
1259 30 ea. Plastic Cases 14.00
4546 22 ea. Drill Sets 119.50
Invoice Subtotal
Invoice Total
ANSWER: $14,827.80
127. A tree farm purchased new evergreen stock listing for $16,200 with a single trade discount of . What is the net
cost of the evergreen stock?
ANSWER: $11,562.75
128. Calculate the net price of merchandise listing for $3,600 less a trade discount of 55%.
ANSWER: $1,620
129. A Beauty Products supplier sold items listing for $8,250 to Revon Salons. The net price of the order was $5,990.
What was the trade discount rate? (Round to the nearest tenth of a percent)
ANSWER: 27.4%
130. Logan's Restaurant ordered 15 cases of tomato sauce with a list price of $17.25 each and 6 cases of tuna with a list
price of $15.90 each. The wholesaler offered a 34% trade discount to Logan. What is the total net amount Logan owes to
the wholesaler? (Round to the nearest cent)
ANSWER: $233.74
131. What was the trade discount rate if merchandise with a list price of $14,200 was sold at a net price of $9,940?
ANSWER: 30%
132. Calculate the trade discount amount of merchandise with a list price of $7,000 less trade discounts of 40/25/15.
ANSWER: $4,322.50
133. What was the trade discount rate if merchandise with a list price of $85,100 was sold at a net price of $63,825?
ANSWER: 25%
134. Brian Leshner buys produce in quantity from the Middle States Produce Co. He receives a 25/20/10 series of trade
discounts. What is the net price factor for this series of trade discounts?
ANSWER: 0.54
135. Ganesh India Shop purchased merchandise from India with a list price of $110,000 less trade discounts of 30/10/5.
Name: Class: Date:

What was the net price of the order?
ANSWER: $65,835
136. Find the net price for an order of merchandise with a list price of $19,000 less trade discounts of 35/25/15. Use the
net price, complement method.
ANSWER: $7,873.13
137. Find the trade discount amount for an order of merchandise with a list price of $15,000 less trade discounts of
40/20/10. (Find the single equivalent discount first)
ANSWER: $8,520
138. Ned's Sporting Goods purchased 260 sets of golf clubs and was given a 40/17/5 series of trade discounts by his
wholesaler. What was the single equivalent discount?
ANSWER: 0.5269
139. Joan Cash ordered candy from her supplier with a net price of $624, terms of sale of 2/15, n/45. What is the net
amount due if the bill is paid by the 15th day?
ANSWER: $611.52
140. CVS buys shampoo from a supplier with an invoice amount of $5,700. The terms of the sale are 5/20, n/30. What is
the net amount due on the order if the bill is paid by the 20th day?
ANSWER: $5,415
141. Price Company received an invoice in the amount of $3,800 dated May 24 for merchandise they purchased. The
terms of the sale are 3/15, 2/30, n/45. What payment should be made if the invoice is paid on June 20?
ANSWER: $3,724
142. On August 18, Sullivan Company received an invoice in the amount of $6,700, having terms of sale of 4/15 EOM.
What is the discount date?
ANSWER: September 15
143. Greybar Electric receives an invoice for an order of wire dated March 16, with terms 3/15, 20 Extra. What is the
discount date?
ANSWER: April 20
144. The Rapid Printing Company can purchase paper from Roberts Supply and receive a series discount of 20/15/10, or
they can do business with National Paper Company and receive a series discount of 25/10/8.
a. Which supplier offers the better deal?
If Rapid ordered paper for a list price of $36,000, how much would they save by choosing
b.
the lower-priced supplier?
ANSWER: a. Roberts Supply
b. $324
145. B & B Auto Parts offers wholesalers a series discount of 35/20/10. Ron Clark buys $18,600 merchandise at list.
a. What is the single equivalent discount?

b. What is the net price Ron Clark will pay for the merchandise?
ANSWER:
Name: Class: Date:

a. 0.532
b. $8,704.80
146. What payment should be made on an invoice in the amount of $625, dated March 7, if the terms of sale are 3/15,
2/30, n/45, and the bill is paid on April 3?
ANSWER: $612.50
147. A paper supplier sold items listing for $24,250 to Big Box Inc. The net price of the order was $18,915. What was the
trade discount rate? (Round to the nearest tenth of a percent)
ANSWER: 22%
148. Ace Formalwear buys tuxedos from a supplier and has an invoice amount of $27,700. The terms of the sale are 3/20,
n/30. If Ace sends a partial payment of $7,400 on the discount date, what is the net amount still due?
ANSWER: $20,071.13
149. A photo shop buys some merchandise with an invoice date of March 25. The terms of sale are 3/10, n/30. Find the
discount date.
ANSWER: April 4
150. Diane’s Pottery Shop orders china from a supplier for $240 including $30 freight charges. The terms of sale are 3/10,
n/30 ROG. The china arrives on November 21 and Diane wants to take advantage of the cash discount.
a. By what date must the invoice be paid to take advantage of the discount?
b. As the bookkeeper for Diane's how much will you send the supplier?
ANSWER: a. December 1
b. $233.70
151. Ring Fencing Company purchases wood in large quantities and receives trade discounts of 25/10 from their
wholesaler. On May 15, Ring purchased lumber having a list price of $45,000. The terms of the sale were 2/10, n/30.
What is the amount of the payment sent on May 25?
ANSWER: $29,767.50
152. Finney & Company purchased $1,800 of merchandise on May 6. The terms were 2/15 EOM. The sneakers were
received on May 20, sent F.O.B. shipping point. Freight charges amounted to $45.
a. What is the discount date?

b. What payment must be made by that date to take advantage of the discount?
ANSWER: a. June 15
b. $1,809
153. Shiva Electronics received an invoice dated July 15 in the amount of $2,300, which included freight charges of $205.
The terms of sale were 3/10, n/45. $360 of the merchandise was damaged in transit and must be returned. What is the
amount due if paid on July 25?
ANSWER: $1,887.95
154. On April 28, The Springfield Company purchased merchandise having a list price of $20,000 from Johnson Brothers.
They were given a series of trade discounts of 15/10/5. The terms of the sale were 3/15 EOM. Freight charges of $600
Name: Class: Date:

were added to the invoice.
a. What is the discount date?
b. What is the amount due on the discount date?
ANSWER: a. June 15
b. $14,698.95
155. On October 20, Revere Products purchased lamps from A&L Imports for $7,500 with terms of 4/15, n/30. On the last
day of discount, Revere Products sent in a $3,000 partial payment.
a. What is the last day of discount?

b. How much credit did Revere get for the partial payment?
ANSWER: a. November 4
b. $3,125
156. Pacific Products buys merchandise from a supplier for $1,320 with terms of 4/20, n/60. The invoice is dated October
15. On October 25, Pacific sends a partial payment to the supplier of $900. What is the amount that must be paid on the
net date?
ANSWER: $382.50
157. Dundaff Plumbing receives an invoice for an order of copper tubing dated May 15, with terms 5/10, 15 Extra. What
is the discount date?
ANSWER: June 9
158. A document detailing a sales transaction that contains a list of goods shipped or services rendered with an account of
all costs is called an order form.
a. True
b. False
ANSWER: False
159. The term used in quoting shipping charges that means "free on board" or "freight on board" is F.O.B.
a. True
b. False
ANSWER: True

Name: Class: Date:
160.
Using the attached picture,

The section labeled A is the Seller's Identification section.
a. True
b. False
ANSWER: True

Name: Class: Date:
161.
Using the picture above, The section labeled J lists the method of payment for shipping charges.
a. True
b. False
ANSWER: True
162. To extend the total on an invoice, multiply the quantity by the unit price per item.
a. True
b. False
ANSWER: True
163.
The abbreviation ea on an invoice refers to the word each.

Name: Class: Date:

a. True
b. False
ANSWER: True
164. The abbreviation gro on an invoice refers to the term grocery.

a. True
b. False
ANSWER: False
165. The invoice for Leda's Lamp Emporium shows the following items:
Qty Description Unit Amount

5 Mid-Century Tall Lamps $45.98 ea
7 Eclectic Energy Lamp Shades $17.83 ea
25 Classic Edison Light Bulbs $9.87 ea
The subtotal line of the invoice equals $601.46

a. True
b. False
ANSWER: True
166. The invoice for Leda's Lamp Emporium shows the following items:
Qty Description Unit Amount

5 Mid-Century Tall Lamps $45.98 ea
7 Eclectic Energy Lamp Shades $17.83 ea
25 Classic Edison Light Bulbs $9.87 ea
If the shipping charges for this invoice were $130.25 and the Insurance for the shipment was $52.50. The invoice total
would be 729.54.
a. True
b. False
ANSWER: False
167. Net Price Factor is the percent of a list price that the business pays for merchandise. It is calculated as 100% + the
Trade Discount Rate.
a. True
b. False
ANSWER: False
168. Patrick's Paint Supplies purchased $7,600 worth of easels, canvas, and pallets from their supplier to sell in their store.
Test Bank for Contemporary Mathematics for Business and Consumers, 8th Edition
Name: Class: Date:

The invoice for the order showed a trade discount of 45%.
The Net Price Factor for this order would be 45%.
a. True
b. False
ANSWER: False
169.
Patrick's Paint Supplies purchased $7,600 worth of easels, canvas, and pallets from their supplier to sell in their store.
The invoice for the order showed a trade discount of 45%.
The Net Price Patrick's Paint Supplies must pay is $4,180.
a. True
b. False
ANSWER: True
170. Sean's Service Station purchased 7,000 gallons of unleaded gas for resale. The list price was $6,924. The net price
was $5,674.
The trade discount rate was around 18.05%
a. True
b. False
ANSWER: True
171. Creighton Construction ordered $200,000 worth of steel beams for a new project. The invoice listed trade discounts
of 30/20/15.
The Net Price = $95,200
a. True
b. False
ANSWER: True
172. A single trade discount that equates to all the discounts in a series or chain is known as a single equivalent discount.
a. True
b. False
ANSWER: True
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Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Copyright Cengage Learning. Powered by Cognero. Page 1

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

14. Find the total for the invoice below:

Stock # Quantity Unit Description Unit Price Total

15. Find the total for the invoice below:

Stock # Quantity Unit Description Unit Price Total

Copyright Cengage Learning. Powered by Cognero. Page 2

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Copyright Cengage Learning. Powered by Cognero. Page 5

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Copyright Cengage Learning. Powered by Cognero. Page 7

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Copyright Cengage Learning. Powered by Cognero. Page 9

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

78. What word is represented by the abbreviation: pr

79. What word is represented by the abbreviation: in.

80. What word is represented by the abbreviation: cwt

81. What word is represented by the abbreviation: kg

82. What word is represented by the abbreviation: pt

83. What word is represented by the abbreviation: drm

84. What word is represented by the abbreviation: oz

85. What word is represented by the abbreviation: dz

86. What word is represented by the abbreviation: gro

87. What word is represented by the abbreviation: ea

88. What word is represented by the abbreviation: M

89. What word is represented by the abbreviation: lbs

Copyright Cengage Learning. Powered by Cognero. Page 14

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Stock # Quantity Unit Merchandise Unit Price Total

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

List Price Trade Discount Trade Discount Rate Net Price

Copyright Cengage Learning. Powered by Cognero. Page 17

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

List Trade Discount Net Price Single Equivalent Trade Net

List Trade Discount Net Price Single Equivalent Trade Net

Amount of Terms of Partial Credit for Partial Net Amount

Copyright Cengage Learning. Powered by Cognero. Page 18

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

Amount of Terms of Partial Credit for Partial Net Amount

Amount of Terms of Partial Credit for Partial Net Amount

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

126. Find the total for the invoice below.

Stock # Quantity Unit Description Unit Price Total

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

a. What is the single equivalent discount?

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

a. What is the discount date?

Chapter 07 - Invoices, Trade Discounts, and Cash Discounts

a. What is the last day of discount?