Your Firm Purchases Goods from Its Supplier on Terms of 2/10,net

question 29

Multiple Choice

Your firm purchases goods from its supplier on terms of 2/10,net 40.The effective annual cost to your firm if it chooses not to take advantage of the trade discount offered and stretches the accounts payable to 60 days is closest to:

• A)20.1%.
• B)15.9%.
• C)13.0%.
• D)11.1%.

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Definitions:

E-Signature Act

Legislation that gives electronic signatures the same legal standing as traditional handwritten signatures in contractual and legal documents.

National Commerce Act

Legislation that regulates online or electronic merchant transactions and electronic signatures.

Seller's Remedies

The legal actions and compensations available to a seller when a buyer breaches a contract, including damages and the right to withhold goods.

Sales Contract

A contract for the sale of goods, as opposed to a contract for the sale of services, real property, or intangible property. Sales contracts are governed by Article 2 of the Uniform Commercial Code.