An invoice dated March 12 in the amount of $50,000 is received by Reliance Corporation on March 16. Cash discount terms on the invoice are 3/10, n/30. On March 16 Reliance mails a check in the amount of $8,000 as partial payment on the invoice. The outstanding balance owed on the invoice is:

Question

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The correct answer is B. The outstanding balance owed on the invoice is $41,752.58.The cash discount is 3%, which means that Reliance Corporation can deduct 3% from the invoice amount if it pays within 10 days. The net amount of the invoice is $50,000 - (3% x $50,000) = $48,500. Reliance Corporation has already paid $8,000, so the outstanding balance owed on the invoice is $48,500 - $8,000 = $41,752.58.

An Invoice Dated March 12 in the Amount of $50,000