If an Invoice Shows a Total of $5,000 with Terms

question 33

Multiple Choice

If an invoice shows a total of $5,000 with terms 5/15,n/60,which of the following is NOT a true statement?

• A)The customer must pay $5,000 within 60 days after the date of the invoice.
• B)The customer may pay $4,750 within 15 days to satisfy the bill.
• C)The customer will receive a 10% discount if they pay within 60 days.
• D)The customer has a discount period of 15 days.

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Definitions:

Net Sales

The total revenue from sales after subtracting returns, allowances for damaged or missing goods, and discounts.

Return On Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company from the common shareholders' perspective.

Net Income

The remaining earnings of a corporation after deducting all costs, taxes, and expenses from its gross revenue.

Common Stock

A type of equity security that represents ownership in a corporation, entitling shareholders to vote on corporate matters and possibly receive dividends.