Geran Company purchased merchandise inventory with an invoice price of $5,000 and credit terms of 2/10, n/30. What is the net cost of the goods if Geran Company pays within the discount period?
A) $5,000
B) $4,900
C) $4,500
D) $4,600

Question

Quizplus · Accepted Answer

The discount offered is 2%, so the discount amount is 2% of $5,000 which is $100 (2% x $5,000 = $100). Therefore, the net cost of the goods if Geran Company pays within the discount period is $5,000 - $100 = $4,900.

Geran Company Purchased Merchandise Inventory with an Invoice Price of $5,000