Merchandise costing $5,600 with terms of 1/10, n/30, with transportation costs of $320 included on the invoice (not included in the $5,600)is sold on account. If the bill is paid within ten days, the amount of the purchase discount is:

Question

Quizplus · Accepted Answer

The purchase discount is calculated on the merchandise cost alone, which is $5,600. With terms of 1/10, n/30, a 1% discount is offered for payment within ten days. Therefore, the discount is 1% of $5,600, which equals $56.00.

Merchandise Costing $5,600 with Terms of 1/10, N/30, with Transportation