If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freight costs of $125, is paid within 10 days, the amount of the purchases discount is $70.

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Quizplus · Accepted Answer

The purchases discount is calculated as 2% of the merchandise cost, which is $70 in this case. Since the invoice is FOB destination, the buyer is responsible for paying the freight costs, which are already prepaid and included in the total cost of $3,500.

If Merchandise Costing $3,500, Terms FOB Destination, 2/10, N/30, with Prepaid