Question

Accounting for Purchase Discounts Kurt Company purchased $5,000 of merchandise from Marilyn Company with terms of 2/10, n/40. What percent discount will Kurt Company get if it pays within the allowed discount period? Answer % If Kurt Company fails to pay within the discount period, how many days does Kurt Company have from the date of purchase before the payment is considered to be late? Answer days

Answer 1

Answer:

For the first question, the discount will be of 2% within the first 10 days of purhcase.

Second quesiton, Kurt has 40 days to pay the invoice before the payment is considered to be late.

Explanation:

the commercial term are as follow:

2/10

n/40

the first number is the proposed discount "n" means zero discount, the customer pays the "n"ominal of the invoice.

The second number is the days outstading for the discount option and the nominal of the invoice. Both, are counted from the date state in the invoice. The nominal period do not start after the discount period.