On October 30, goods with a list price of $9,200 are sold, subject to a trade discount of 25 percent with terms of 2/10, n/30. Payment is received from the customer on November 5. The amount of cash received on November 5 is

Question

Quizplus · Accepted Answer

The trade discount of 25% means that the customer pays only 75% of the list price:
$9,200 x 0.75 = $6,900
The terms of 2/10, n/30 mean that the customer can take a 2% discount if payment is made within 10 days. Since the payment was received on November 5, which is 6 days after the sale, the customer did not take the discount. Therefore, the cash received is the full amount of $6,900.

On October 30, Goods with a List Price of $9,200