A firm purchased goods with a purchase price of $1,000 and credit terms of 1/10 net 30. The firmpaid for these goods on the 5th day after the date of sale. The firm must pay__________ for the goods.
A) $1,100
B) $900
C) $1,000
D) $990

Question

Quizplus · Accepted Answer

The credit terms of 1/10 mean that the firm can take a 1% discount if they pay within 10 days of the sale date. Since they paid on the 5th day after the sale, they still qualify for the discount. Therefore, the amount they must pay is $1,000 minus the 1% discount ($1,000 x 0.01 = $10), which equals $990.

A Firm Purchased Goods with a Purchase Price of $1,000