Question

A buyer of $7,000 in merchandise inventory failed to take advantage of the vendor's credit terms of 2/15, n/45, and instead paid the invoice in full at the end of 45 days. By not taking advantage of the cash discount, the buyer lost the discount of:_________
a. 100
b. 77
c. 1155
d. 770
e. 231

Answer 1

• Cash discount refers to an incentive that a seller offers toward a buyer in order to pay a bill before its time limit.
• In this, the seller will normally decrease the amount that the customer owes by either a modest percentage or a fixed monetary amount, and the further explanation can be defined as follows:

Given:

• The credit terms are: $\bold{\frac{2}{15} \ \ \frac{n}{45}}$
• When the $2\%$ discount with $\bold{45\ days}$ to pay
• So, the  price of the merchandise is: $\bold{ 7000}$

Calculating the cash discount:

$= \bold{7000 \times 2\%}\\\\= \bold{7000 \times \frac{2}{100}}\\\\= \bold{70\times 2}\\\\= \bold{\ 140}$

Therefore the answer is "140", and all the given choices are wrong.

Learn more:

cash discount: brainly.com/question/4503765