Buskirk Construction Buys on Terms of 2/15,net 60 Days

question 7

Multiple Choice

Buskirk Construction buys on terms of 2/15,net 60 days.It does not take discounts,and it typically pays on time,60 days after the invoice date.Net purchases amount to $450,000 per year.On average,how much "free" trade credit does the firm receive during the year? (Assume a 365-day year,and note that purchases are net of discounts.)

• A)$18,493
• B)$19,418
• C)$20,389
• D)$21,408
• E)$22,479

Understand product branding strategies and their implications on consumer choices.

Understand different types of warranties and their implications.

Identify and apply appropriate legal actions in consumer disputes.

Calculate unit prices and understand their significance in consumer decisions.

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Definitions:

Accounts Receivable

Debts owed by customers to a corporation for goods or services that have been delivered but remain unpaid.

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for changes in non-cash accounts to calculate operating cash flow.

Net Cash Flows

The total amount of cash being transferred into and out of a business, after all revenues and expenses have been accounted for.

Accumulated Depreciation

The total amount of depreciation expense that has been charged against a fixed asset since it was put into use.