A company that uses a perpetual inventory system purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. The amount of the cash paid on July 28 equals:
A)$200.
B)$1,564.
C)$1,568.
D)$1,600.
E)$1,800.

Question

Quizplus · Accepted Answer

The company purchased $1,800 of merchandise and returned $200, leaving a balance of $1,600. Since the payment was made on July 28, which is beyond the discount period (2/10), no discount is applied. Therefore, the full amount of $1,600 is paid.

A Company That Uses a Perpetual Inventory System Purchased $1,800