If a company uses the perpetual inventory method and it purchases inventory on account worth $2,000 with terms 2/10 n/30 what will be the cost of the inventory when the inventory is purchased if it is using the net method?
A)$2,000
B)$1,800
C)$1,960
D)$2,200

Question

Quizplus · Accepted Answer

To calculate the cost of inventory using the net method, we need to deduct the purchase discount from the total cost of inventory. In this case, the purchase discount is 2% of $2,000 which equals $40. So, the cost of inventory when purchased using the net method will be $2,000 - $40 = $1,960. Therefore, the correct answer is C.

If a Company Uses the Perpetual Inventory Method and It