An Invoice for $4,500 Dated September 15 with Terms 2/10

question 241

Multiple Choice

An invoice for $4,500 dated September 15 with terms 2/10, 1½/20, n/30, EOM is received in the mail on September 20. What payment would settle the invoice on October 15?

• A) $4,500.00
• B) $4,432.50
• C) $4,410.00
• D) $4,590.00
• E) $4,567.50

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Definitions:

Prevention Cost

Costs incurred to prevent defects in products or services, including training, quality control, and equipment maintenance.

Internal Failure Cost

Costs associated with defects found before a product or service is delivered to the customer, such as scrap and rework expenses.

Value-Added Activity

An activity that is needed to meet customer requirements.

Preventive Maintenance

Preventive maintenance involves regularly scheduled inspections, service, and repairs of equipment and facilities to prevent unexpected breakdowns and extend their useful life.