A Buyer of $7,000 in Merchandise Inventory Failed to Take

question 239

Multiple Choice

A buyer of $7,000 in merchandise inventory failed to take advantage of the vendor's credit terms of 2/15,n/45,and instead paid the invoice in full at the end of 45 days.By not taking advantage of the cash discount,the buyer lost the discount of:

• A)$70.
• B)$1,050.
• C)$700.
• D)$100.
• E)$140.

---

Definitions:

State Unemployment Taxes

Taxes paid by employers to their state government to fund unemployment insurance benefits for workers who have lost their jobs.

Payroll Tax

Taxes imposed on employers or employees, usually calculated as a percentage of the salaries that employers pay their staff.

Schedule H

A form filed with the IRS to report taxes owed on wages paid to a household employee.

Federal Taxes

Taxes imposed by the federal government on income, payroll, property, sales, and other activities, used to fund national programs and services.