A Company Is Offering a Discount with Terms 3/15 Net

question 9

Multiple Choice

A company is offering a discount with terms 3/15 net 40.What is the discount rate associated with this offer?

• A) 3%
• B) 15%
• C) 40%
• D) 20%
• E) 5%

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Definitions:

Dividends

Disbursements issued by a company to its shareholders, typically originating from the firm's earnings.

Fair Value Through Profit or Loss

An accounting approach where financial assets are recorded at their fair value, with changes affecting the profit or loss statement directly.

Market Value

The current price at which an asset can be bought or sold in a public market.

Cost Method

An accounting method used to value investments where the investment is recorded at purchase cost without recognizing interim income or loss.