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:

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends, indicating how much profit is reinvested.

Net Income

The amount of money remaining after all operating expenses, taxes, and interest have been deducted from total revenue.

Total Assets

The sum of all assets owned by a company, including cash, inventory, property, and equipment.