Which of the Following Is Correct Concerning Terms of Trade

question 7

Multiple Choice

Which of the following is correct concerning terms of trade credit of 4/10,EOM,net 90?

• A) The discount period expires on the last day of the month.
• B) The invoice becomes delinquent 90 days after the last day of the month.
• C) The discount period ends on the 10^th day of the month following the invoice.
• D) The discount period ends either 10 days after invoicing or at the end of the month, whichever is earlier.

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Definitions:

LIFO Periodic

An inventory valuation method, Last In First Out, used in periodic inventory systems where the last items added to the inventory are assumed to be sold first.

Perpetual LIFO

Perpetual LIFO, or Last-In, First-Out, is an inventory accounting method continuously updating inventory and costs of goods sold by assuming the last items purchased are the first to be sold.

Ending Inventory

The worth of products ready for purchase at the conclusion of a financial period.