Asked by WORST NIGHTMARE on Jun 05, 2024
Verified
Sterling Industries offers customers cash discounts for paying their bills within 10 days. Assume a Sterling Industries customer purchases $10,000 worth of goods on October 1 and the cash discount is "2/10 net 30." If the customer pays his bill on October 9, the amount due will be $9,000.
Cash Discounts
Discounts earned by buyers who pay bills within a stated period.
Sterling Industries
A fictitious or placeholder name that could refer to a company involved in manufacturing, technology, or another sector.
Net 30
A payment term that indicates the invoice amount must be paid in full within 30 days from the invoice date.
- Attain an understanding of pricing structures, discounting mechanisms, and credit policy formulations to achieve competitive superiority.
Verified Answer
DA
duncan abugaJun 09, 2024
Final Answer :
False
Explanation :
The correct amount due would be $9,800 because a 2% discount on $10,000 is $200, so $10,000 - $200 = $9,800.
Learning Objectives
- Attain an understanding of pricing structures, discounting mechanisms, and credit policy formulations to achieve competitive superiority.
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