Company X sells $600 of merchandise on account to Company Y with credit terms of 2/10, n/30. If Company Y remits a check taking advantage of the discount offered, what is the amount of Company Y's check?

Question

Quizplus · Accepted Answer

The discount offered is 2% and the payment terms are net 30, which means the full amount is due in 30 days. To calculate the amount of the check taking advantage of the discount, we multiply the invoice amount by (1 - 2%) = 0.98.

$600 x 0.98 = $588

Therefore, the amount of Company Y's check is $588.

Company X Sells $600 of Merchandise on Account to Company