An Invoice Received from a Supplier for $8,000 on January

question 107

Multiple Choice

An invoice received from a supplier for $8,000 on January 1 with terms 1/15,n/30 means that the company should pay

• A)$7,920 before the end of January.
• B)either $7,920 before January 16 or $8,000 before the end of the month.
• C)$8,000 between January 2 and January 16.
• D)$6,800 before January 16.

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Definitions:

Net Pay

The amount of money an employee takes home after deductions like taxes and retirement contributions have been subtracted.

FICA Tax

A mandatory tax used to fund the United States Social Security and Medicare programs, deducted from the wages of employees.

Federal Income Tax

A tax levied by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Withholding Allowance

A claim made by an employee on a W-4 form to reduce the amount of tax withheld from their paycheck.