A firm purchased goods on January 27 with a purchase price of $1,000 and credit terms of 2/10 net 30 EOM. The firm paid for these goods on February 9. The firm must pay ________ for the goods.
A) $1,000
B) $980
C) $800
D) $900

Question

Quizplus · Accepted Answer

The terms 2/10 net 30 EOM mean that the buyer can take a 2% discount if payment is made within 10 days of the invoice date, otherwise, the full amount is due within 30 days of the end of the month. In this case, the buyer paid on February 9, which is within the discount period of 10 days, so they are entitled to take the discount.
Discount = 0.02 * $1,000 = $20
Amount due if discount is taken = $1,000 - $20 = $980

A Firm Purchased Goods on January 27 with a Purchase