Asked by Kamia Bryan on Jul 20, 2024
Verified
If merchandise costing $3,500, terms FOB destination, 2/10, n/30, with prepaid freight costs of $125, is paid within 10 days, the amount of the purchases discount is $70.
FOB Destination
A shipping term indicating that the seller is responsible for the goods and the cost of transport until they are delivered to the buyer's location.
Prepaid Freight Costs
Expenses paid in advance for the transportation of goods.
Purchases Discount
A reduction in the price paid for goods and services if payment is made within a certain period, often used to encourage early payment.
- Gain an understanding of the calculation processes for purchase and sales discounts and their effects on fiscal statements.
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Learning Objectives
- Gain an understanding of the calculation processes for purchase and sales discounts and their effects on fiscal statements.
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