A firm purchased goods with a purchase price of $1,000 and credit terms of 1/10 net 30. The firm paid for these goods on the 5th day after the date of sale. The firm must pay ________ for the goods.
A) $990
B) $900
C) $1,000
D) $1,100

Question

Quizplus · Accepted Answer

The firm must pay $990 for the goods because the credit terms 1/10 net 30 mean that the firm can take a 1% discount ($10) off the purchase price if it pays within 10 days. Since the firm paid on the 5th day, it qualifies for this discount, reducing the payment to $990.

A Firm Purchased Goods with a Purchase Price of $1,000