A company buys merchandise costing $25,000 with terms of 2/10 n/30. The adjustment to the Merchandise Inventory account, assuming the discount is taken, will be
A) $250.
B) $300.
C) $500.
D) $0.

Question

Quizplus · Accepted Answer

The discount is 2% of $25,000, which is $500 ($25,000 * 0.02). Therefore, the adjustment to the Merchandise Inventory account would be a reduction of $500.

A Company Buys Merchandise Costing $25,000 with Terms of 2/10