Dennis Has Made a Purchase of $50,000 Using Trade Credit

question 36

Multiple Choice

Dennis has made a purchase of $50,000 using trade credit with terms of 2/10 net 30.How much discount will a he receive if the buyer pays the bill on the net due date?

• A)$0
• B)$500
• C)$1200
• D)$3,000

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Definitions:

Operating Activities

Activities that relate directly to the primary business operations of a company, such as selling products or providing services.

Financing Activities

Transactions that involve raising capital for the business and repaying investors, such as issuing debt and equity or paying dividends.

Financing Activities

Actions that result in changes to the size and composition of the equity capital or borrowings of a company.

Cash Flows

Cash flows represent the movement of money into and out of a business, crucial for understanding liquidity, viability, and overall financial health.