A buyer of $7,000 in merchandise inventory failed to take advantage of the vendor's credit terms of 2/15,n/45,and instead paid the invoice in full at the end of 45 days.By not taking advantage of the cash discount,the buyer lost the discount of:
A)$70.
B)$1,050.
C)$700.
D)$100.
E)$140.

Question

Quizplus · Accepted Answer

The discount offered is 2% of $7,000, which is calculated as $7,000 * 0.02 = $140.

A Buyer of $7,000 in Merchandise Inventory Failed to Take