Cashmere Corporation purchased merchandise inventory with an invoice price of $16,000 and credit terms of 2/10, n/30.How much cash will Cashmere pay if they pay within the discount period?
A)$16,000
B)$15,680
C)$14,720
D)$14,400

Question

Quizplus · Accepted Answer

The discount period is 2/10 which means Cashmere will receive 2% off the invoice price if they pay within 10 days.

2% of $16,000 = $320

So the amount that Cashmere would need to pay within the discount period would be:

$16,000 - $320 = $15,680

Cashmere Corporation Purchased Merchandise Inventory with an Invoice Price of $16,000