Archie Corporation\'s trial balance included debits to expense accounts of $125,

Question

Archie Corporation's trial balance included debits to expense accounts of $125,000, credits to revenue accounts of $175,000, and debits to the Dividends account of $50,000. Based on this information, the company's net income(loss) appears to be:

A. $0.

B. ($125,000).

C. $100,000.

D. $175,000.

E. None of these

Which of the following statements is false?

A. Cash discounts are a convenient means of reducing list prices to invoice prices.

B. Cash discounts are used to encourage customers to make prompt payments.

C. For a seller, cash discount and sales discount are synonymous terms.

D. Cash discounts may be offered in conjunction with trade discounts.

E. None of these.

Explanation / Answer

Ans 1) Ans is E none of these, Dividend is not an expense item hence it does not appear in income statement and also does not impact the accounting net profit, here the net profit is coming as 175000-125000=50000, which is not there in the option, hence the answer is E - none of these.

Ans 2) ans is E - None of these here also, Cash discounts can be used to reducing list prices to invoice prices, cash discounts are offered to get the early payments, for seller sales/ cash discount are synonyms and cash discount and trade discount both can be offered together, hence all statements are true and answer is E - None of these. no statement is false.

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