Asked by Taniya Banks on May 23, 2024
Verified
A credit sale of $4000 is made on April 25 terms 3/10 n/30 on which a return of $300 is granted on April 28. What amount is received as payment in full on May 4?
A) $3589
B) $3700
C) $3880 d $4000
Credit Sale
A transaction where goods or services are provided to a customer with the agreement that payment will be made at a future date.
Return
The income generated from an investment, or the act of returning goods to the seller for a refund or exchange.
Terms
Conditions and agreements under which something is provided or is to be provided, detailing the rate, quantity, and period.
- Apply accounting principles to handle returns and early payment discounts in credit sales.
Verified Answer
SV
Srivi VinjamuriMay 24, 2024
Final Answer :
A
Explanation :
The net amount due after return is $3700 (4000-300).
If payment is made by May 4, the customer can take advantage of the 3% discount, which amounts to $111 (0.03*3700).
Therefore, the payment in full received on May 4 would be $3589 (3700-111).
If payment is made by May 4, the customer can take advantage of the 3% discount, which amounts to $111 (0.03*3700).
Therefore, the payment in full received on May 4 would be $3589 (3700-111).
Learning Objectives
- Apply accounting principles to handle returns and early payment discounts in credit sales.