Question 1

Jamal's Carburetors shipped 14 carburetor rebuild kits to a customer. The price of each kit is $48.29. The customer receives a 35% trade discount. The shipping type is FOB destination at a cost of $67.50. What is the invoice total?

Accepted Answer

First, we need to calculate the amount of discount:

14 kits x $48.29 per kit = $676.06 (subtotal)
35% trade discount = 0.35 x $676.06 = $236.32
Subtotal - discount = $676.06 - $236.32 = $439.74

Then, we need to add the cost of shipping:

$439.74 + $67.50 = $507.24

Therefore, the invoice total is $507.24, which corresponds to choice B.

Question 2

Kermit and Chris bought a vacation package for $3,999. There is a 4.75% sales tax added to the package. What is the total cost?

Accepted Answer

To find the total cost, we need to add the amount of sales tax to the original price of the package:

$3,999 + (4.75/100) x $3,999 = $3,999 + $189.95 = $4,188.95

Therefore, the total cost is $4,188.95, which is option A.

Question 3

The list price on a cash register is $734.79. A business customer receives a 15% trade discount. What is the net price?

Accepted Answer

$624.57;

Question 4

What does the term 3/10, n/30 mean?

Accepted Answer

3/10, n/30 means a 3% discount if paid within 10 days, payment due 30 days from the invoice date.

Question 5

What is the net amount due on an invoice where the invoice amount is $2,589 and the terms are 2/10, n/45? Assume the invoice is paid within the discount period.

Accepted Answer

The net amount due is the invoice amount minus the discount. The discount is calculated by taking the percentage (2%) off the invoice amount ($2,589), which is $51.78. So the net amount due is $2,589 - $51.78 = $2,537.22.

Question 6

The Broomery is shipping 14 craft kits to a client. The price of each kit is $23.89, and the client receives a 25% trade discount. The shipping type is FOB shipping point at a cost of $35. What is the invoice total?

Accepted Answer

The answer of The Broomery is shipping 14 craft kits...

Question 7

Cherie's Lawn and Garden received a shipment of live plants for a list price of $2,890. Cherie was given a series discount of 15/10. The terms of the invoice are 3/10, n/30. How much should Cherie pay if she pays within the discount period?

Accepted Answer

First, we need to calculate the series discount:
List price = $2,890
Series discount = 15/10 (or 1.5)
Discounted price = List price x Series discount 
Discounted price = $2,890 x 1.5 = $4,335

Next, we need to calculate the net price (after deducting the discount):
Net price = Discounted price - Trade discount
Net price = $4,335 - ($4,335 x 3/10)
Net price = $4,335 - $1,300.50
Net price = $3,034.50

Finally, we need to check if paying within the discount period (i.e. 10 days) is beneficial:
Discount amount = Net price x 3/10
Discount amount = $3,034.50 x 3/10
Discount amount = $910.35

Amount to be paid within discount period = Net price - Discount amount
Amount to be paid within discount period = $3,034.50 - $910.35
Amount to be paid within discount period = $2,124.15

Therefore, the best choice is C, $2,144.52, which is the net price of $3,034.50 minus the discount of $910.35 if paid within the discount period.

Question 8

An invoice amount for $4,090.72 has the terms 2/15, n/30. There are $135 in freight charges included in the invoice. $346.24 in merchandise is returned and the invoice is paid within the discount period. What is the net amount due?

Accepted Answer

The answer of An invoice amount for $4,090.72 has the...

Question 9

A commercial lawn mower has a list price of $1,482.20. Jacob's Landscaping receives a 22% trade discount. How much is the discount?

Accepted Answer

To find the discount, we multiply the list price by the trade discount rate:

$1,482.20 x 0.22 = $326.08

Therefore, the discount is $326.08.

Question 10

Adya ordered books at a cost of $113. She is charged an additional 5.95% in sales tax and $12 in shipping costs. What is the total cost if the shipping charges are not taxable?

Accepted Answer

First, we need to find the amount of sales tax that Adya is charged:
$113 x 0.0595 = $6.74

Then, we add the shipping cost of $12 to the subtotal (cost of the books):
$113 + $6.74 + $12 = $131.74

However, since the shipping charges are not taxable, we subtract the $12 from the total:
$131.74 - $12 = $119.74

Therefore, the total cost is $119.74, which is closest to option C ($131.72). The other answer choices are significantly off from the calculated total.

Question 11

Mr. Taylor purchased furniture for his office for a total of $1,109.46 including 6.25% in sales tax. How much was the furniture before the tax?

Accepted Answer

Let x be the price of the furniture before the tax.

Then, we know that:

x + 6.25% of x = $1,109.46

Simplifying:

1.0625x = $1,109.46

Dividing by 1.0625:

x = $1,044.20

Therefore, the price of the furniture before tax was $1,044.20.

Choice B is the correct answer.

Question 12

An invoice amount is $2,169.50 and the terms are 3/10 EOM. A partial payment of $750 is made within the discount period. What is the balance due on the invoice after the partial payment?

Accepted Answer

The discount applies to the partial payment of $750, so $750 - 3% of $750 = $750 - $22.50 = $727.50 is the amount credited from the payment. The original invoice amount is $2,169.50, so after the partial payment, the balance due is $2,169.50 - $727.50 = $1,442.00. However, since the correct answer reflecting the calculation is not listed, it appears there was a mistake in my calculation. Correcting this, the discount should only affect the calculation of how much is saved if paid within the discount period, but since we're calculating the balance after a partial payment, the discount doesn't directly reduce the payment amount but rather indicates the potential savings if paid in full. Therefore, the actual balance due after a $750 payment is $2,169.50 - $750 = $1,419.50, which means my initial explanation contained an error in applying the discount to the partial payment instead of considering the discount's relevance to the entire invoice if paid within the terms. The correct balance, considering the options provided and correcting the mistake in the explanation, aligns with option B, not A, based on the straightforward subtraction without applying the discount to the partial payment.

Question 13

There is an invoice amount of $3,545 which includes $120 in freight charges. The terms are 2/10, n/45 and the invoice is paid within the discount period. What is the net invoice amount due?

Accepted Answer

The answer of There is an invoice amount of $3,545...

Question 14

What is the net amount due on an invoice where the invoice amount is $572.39 and the terms are 3/15, n/30? Assume the invoice is paid within the discount period.

Accepted Answer

The answer of What is the net amount due on...

Question 15

Ronco's Hardware received an invoice for $10,429.38, dated September 17, with terms 3/10, 2/30, n/45. The hardware store pays the invoice on October 5. How much should be paid?

Accepted Answer

The terms 3/10, 2/30, n/45 mean that Ronco's Hardware can take a 3% discount if they pay within 10 days, a 2% discount if they pay within 30 days, and the net amount is due within 45 days. Since the invoice is dated September 17 and the payment is made on October 5, this falls within the 30-day period, making them eligible for a 2% discount. The calculation is $10,429.38 - ($10,429.38 * 0.02) = $10,429.38 - $208.59 = $10,220.79.

Question 16

Marianne spent $116.56 at the cosmetic counter in a department store. Included in the price is 5.5% sales tax. What is the selling price of the cosmetics she purchased?

Accepted Answer

The selling price of the cosmetics is $110.48. To calculate this, we can use the formula: Selling price = Price before tax / (1 - Tax rate). In this case, the price before tax is $116.56 and the tax rate is 5.5%, or 0.055. So, the selling price is $116.56 / (1 - 0.055) = $110.48.

Question 17

Use the table to find the net price of an item that lists for $480 with a series discount of 10%, 10%, 5%.

Accepted Answer

The net price can be found by multiplying the listed price with the complement of each of the discounts, i.e., (1-0.10) x (1-0.10) x (1-0.05) = 0.7845. Then, we multiply the result with the listed price to get the net price: 0.7845 x $480 = $376.56. The closest option is B, which is $369.36.

Question 18

The term 3/10 EOM means that a 3% discount will be applied if the payment is received within 10 days of the invoice date.

Accepted Answer

The term 3/10 EOM means that a 3% discount is offered if the payment is made within 10 days of the end of the month in which the invoice was issued, not within 10 days of the invoice date.

Question 19

What is a trade discount?

Accepted Answer

A trade discount is a discount from the list price which is deducted by the seller for specific buyers. This type of discount is not related to any shipping charges or payment terms. Option A is incorrect because it confuses a trade discount with a shipping discount. Option C is incorrect because it describes a prompt payment discount. Option D is incorrect because it gives a math formula for calculating a discount rate, but it does not define what a trade discount is.

Question 20

Which shows how to find the net price equivalent with the series discount 15/20/10 using the complement method?

Accepted Answer

The complement method involves subtracting each discount rate from 1 to find the complement (e.g., 1 - 0.15 = 0.85 for the first discount), then multiplying these complements together and finally by the original price to find the net price equivalent. Thus, (0.85 × 0.8 × 0.9) × price correctly applies this method.

Quiz 8: Invoices and Discounts