Fehr Company sells merchandise on account for $5,000 to Kelly Company with credit terms of 2/10, n/30. Kelly Company returns $1,000 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?
A) $4,900
B) $4,920
C) $4,000
D) $3,920

Question

Quizplus · Accepted Answer

The original sale was $5,000, with a $1,000 return, reducing the amount to $4,000. The 2% discount on $4,000 is $80, so the check amount is $4,000 - $80 = $3,920.

Fehr Company Sells Merchandise on Account for $5,000 to Kelly