Alliance Corporation purchased inventory with an invoice price of $22,000 and credit terms of 1/10, n/15. How much cash will Alliance pay if they pay within the discount period?
A) $22,000
B) $21,780
C) $22,220
D) $18,700

Question

Quizplus · Accepted Answer

Alliance Corporation will pay $21,780 if they pay within the discount period because they can take advantage of a 1% discount on the $22,000 invoice price, which is $220. Therefore, $22,000 - $220 = $21,780.

Alliance Corporation Purchased Inventory with an Invoice Price of $22,000