QQuestionAccounting
QuestionAccounting
On July 1, a company receives an invoice for $800 with the terms 1 / 10, net 30.
On July 15, the payment should be ***_***___.
- $692
- $790
- $792
- $800
- $808
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Answer
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Step 1:: Understand the problem and the given information.
We are given an invoice amount of $800 with terms 1 / 10, net 30. This means that if the payment is made within 10 days, there is a 1% discount. If not, the full amount must be paid within 30 days of the invoice date.
Step 2:: Calculate the discounted amount if paid within 10 days.
Discounted Amount = $800 × (1 - 0.1) = $800 × 0.9 = $720
The discounted amount is calculated as follows: Discounted Amount = Invoice Amount × (1 - Discount Rate) where the Discount Rate is given by the problem: 1 / 10 = 0.1 or 10%.
Step 3:: Determine the payment due date.
The payment due date is 30 days after the invoice date, which is July 1. So, the payment due date is July 31. However, we are asked to find the payment on July 15.
Step 4:: Compare the discounted amount with the payment due date.
Since the payment date (July 15) is before the due date (July 31), we should calculate the discounted amount. In Step 2, we calculated the discounted amount to be $720.
Step 5:: Select the payment amount on July 15.
The correct answer is: - $692 (incorrectly listed as an option) The correct payment amount on July 15 should be the discounted amount, which is $720. However, none of the provided options match this amount. It seems there is a mistake in the options provided.
Final Answer
The correct answer is: - $692 (incorrectly listed as an option) The correct payment amount on July 15 should be the discounted amount, which is $720. However, none of the provided options match this amount. It seems there is a mistake in the options provided.
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