Chapter 3 Review Questions

NOTE: This was not a class activity.

1 On Dec. 29, 2011 Barnett Co. ships $200,000 of merchandise by common carrier to Jenton
Co. The terms of the sale are 2/10, n/30, FOB shipping point. It takes 4 days for the
merchandise to arrive at Jenton Co. Both companies have Dec. 31 year-ends. How long
does Jenton Co. have to take the discount?

A 2 days
B 4 days
C 10 days
D 30 days



2 On Dec. 29, 2011 Barnett Co. ships $200,000 of merchandise by common carrier to Jenton
Co. The terms of the sale are 2/10, n/30, FOB shipping point. It takes 4 days for the
merchandise to arrive at Jenton Co. Both companies have Dec. 31 year-ends. How much
is the discount?

A $4,000
B $10,000
C $30,000
D None of the above.



3 On Dec. 29, 2011 Barnett Co. ships $200,000 of merchandise by common carrier to Jenton
Co. The terms of the sale are 2/10, n/30, FOB shipping point. It takes 4 days for the
merchandise to arrive at Jenton Co. Both companies have Dec. 31 year-ends. How long
until the invoice is past due?

A 2 days
B 4 days
C 15 days
D 30 days



4 On Dec. 29, 2011 Barnett Co. ships $200,000 of merchandise by common carrier to Jenton
Co. The terms of the sale are 2/10, n/30, FOB shipping point. It takes 4 days for the
merchandise to arrive at Jenton Co. Both companies have Dec. 31 year-ends. Who will
show the inventory on their 12/31/11 balance sheet?

A Barnett Company
B Jenton Company
C Neither company
D I don't know








5 A candy store sells over 100 types of candy. One of the candies sold is malted milk balls.
The cost of the malted milk balls is a:

A fixed cost
B variable cost
C mixed cost
D strategic cost

6 Your cell phone company charges you $39.99 a month plus $.06 per minute for every
minute over 1,000 minutes you talk each month. For the cell phone company, what type of
revenue behavior pattern does this describe:

A fixed revenue
B variable revenue
C mixed revenue
D evaluating revenue