A company using the perpetual inventory system purchased inventory worth $20,000 on account with terms of 2/10,n/30.Defective inventory of $3,000 was returned two days later,and the accounts were appropriately adjusted.If the invoice is paid within 10 days,the amount of the purchase discount that would be available to the company is ________.
A)$340
B)$460
C)$400
D)$390

Question

Quizplus · Accepted Answer

The purchase discount is 2%, which means that the company can deduct 2% of the invoice amount if it pays within 10 days. The invoice amount is $20,000, so the purchase discount is $20,000 x 0.02 = $400.

A Company Using the Perpetual Inventory System Purchased Inventory Worth