Longoria Company purchased merchandise inventory on account with a list price of $5,000 and credit terms of 1/10, n/30. What was the net or cash cost for the merchandise?

Question

Quizplus · Accepted Answer

The net or cash cost is calculated as follows:
List price = $5,000
Discount = 1% of $5,000 = $50
Net or cash cost = list price – discount = $5,000 - $50 = $4,950. Therefore, the correct answer is D.

Longoria Company Purchased Merchandise Inventory on Account with a List