2020 PHS 3E POA EOY P1 Q2

2020 PHS 3E POA EOY P1 Q2

Soh Ling sells goods on credit to a few customers. Hui Wen is one of her credit customers.

Additional information

REQUIRED

ai. Explain the term “credit sales”.

[1]

ii. Suggest a reason for business to sell goods on credit.

[1]

b. State the ledger in which Soh Ling would keep Hui Wen’s account.

[1]

The following account was extracted from Soh Ling’s books.

Trade Receivable Hui Wen account

Date

Particulars

DR $

CR $

BAL $

2020

Jun 1

 

Balance b/d

  

 

1 450   Dr

8

Sales revenue

6 000

  

11

Sales returns

 

400

 

25

Cash at bank

 

1 421

 

25

Discount allowed

 

29

 

REQUIRED

b. State the ledger in which Soh Ling would keep Hui Wen’s account.

[4]

i. Jun 8

ii. Jun 11

iii. Jun 25

c. State the documents issued by Soh Ling to Hui Wen on

[2]

i. Jun 8

ii. Jun 11

d. Calculate the amount owed by Hui Wen to Soh Ling on Jun 30, 2020.

[1]

Soh Ling shared on her credit policies as follows:

1. Credit customers whose purchases are above $10 000 receive a 10% discount.

2. Credit customers who pay the bill within 30 days receive another 2% discount.

REQUIRED

e. Explain two differences between the two types of discount described above.

[2]

[TOTAL 12]

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