Leno Company sells goods to the Fallon Company for $10,000. It offers credit terms of 2/10, n/30. If Fallon Company pays the invoice within the discount period, Leno Company will record a debit to Cash in the amount of:

Question

Quizplus · Accepted Answer

If Fallon Company pays within the discount period, they receive a 2% discount on $10,000, which is $200. Therefore, they pay $10,000 - $200 = $9,800, which is the amount Leno Company will record as a debit to Cash.

Leno Company Sells Goods to the Fallon Company for $10,000