A purchase invoice shows 10 items priced at £240 less trade discount of 20%. A cash discount of
2)5% is allowed if payment is made within 30 days. How much will the entity have to pay assuming payment is made within the 30 days?

Question

Quizplus · Accepted Answer

First, calculate the trade discount: £240 * 20% = £48. So, the price after the trade discount is £240 - £48 = £192 per item. For 10 items, it's £192 * 10 = £1,920. Then, apply the cash discount: £1,920 * 5% = £96. So, the final amount after the cash discount is £1,920 - £96 = £1,824. However, there seems to be a mistake in my calculation or the options provided. Correctly, after recalculating the cash discount on £1,920, the payment within 30 days would indeed be £1,920 - 5% of £1,920 = £1,920 - £96 = £1,824. The correct answer based on the calculation is not listed in the options, indicating a potential error in the question or the response options. Given the options, the closest and intended correct answer would be D) £1,872, acknowledging a discrepancy in the calculation presented.

A Purchase Invoice Shows 10 Items Priced at £240 Less