Asked by Maria Mendez on Jun 16, 2024
Verified
Howard Company purchased merchandise inventory with an invoice price of $7000 and credit terms of 2/10 n/30. What is the net cost of the goods if Howard Company pays within the discount period?
A) $6300
B) $6440
C) $6860
D) $7000
Invoice Price
The price listed on an invoice, representing the amount the buyer agrees to pay the seller for goods or services provided.
Credit Terms
The conditions under which credit is extended by a seller to a buyer, including payment deadlines and interest rates.
Discount Period
The time period that a buyer has to take advantage of trade discounts offered by a seller for early payment of invoices.
- Comprehend the computation of net cost for goods when payment occurs within the discount period.
Verified Answer
ES
Edward SpencerJun 19, 2024
Final Answer :
C
Explanation :
The net cost of the goods if Howard Company pays within the discount period is calculated by applying the discount to the invoice price: $7000 - ($7000 * 2%) = $7000 - $140 = $6860.
Learning Objectives
- Comprehend the computation of net cost for goods when payment occurs within the discount period.