Which One of the Following Statements Is Correct If You

question 71

Multiple Choice

Which one of the following statements is correct if you purchase an item with credit terms of  3/15, net 45?

• A) If you pay within 3 days, you will receive a discount of 15 percent.
• B) If you pay within 15 days, you will receive a discount of 3 percent.
• C) If you do not pay within 15 days, you will be charged interest at a rate of 3 percent per month.
• D) If you pay 3 percent of your purchases within 15 days, you will have 45 days to pay for the remainder.
• E) One-third of your purchase is due in 15 days and the rest is due in 45 days.

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Definitions:

Containers Refurbished

The process of cleaning, repairing, and potentially updating used containers for reuse.

Flexible Budget

A flexible budget adjusts to various levels of operation activity, providing a more accurate comparison of budgeted and actual costs.

Other Expenses

Costs not directly related to the production or selling of goods or services, including interest payments, losses from asset sales, or administrative expenses.

Spending Variance

A financial metric that measures the difference between the budgeted or standard cost of production and the actual cost incurred.