Accounting Question!!!

Question

Etcetera Clothing sold merchandise inventory on account at a price of $22,000 with payment terms of 2/10, n/30. The merchandise cost Etcetera Clothing $18,000. If the customer paid for the merchandise 5 days after receiving the invoice, how much cash was collected by Etcetera Clothing?

$18,000
$21,560
$17,640
$22,000

Answer 1

the payment term 2/10, net 30 means that a two percent discount is given if the invoice is paid within 10 days. Regardless, the full balance is due 30 days after the date of the invoice.

 

In this case, the customer paid the invoice within 10 days, so a discount of 2% will apply.

 

The amount received was $22000 - (22000 x 0.02) = 22000 - 440 = $21,560

 

so, the correct choice is $21,560

Answer 2

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