If Merchandise Sells for $3,500, with Terms of 3/15, N/45

question 61

Multiple Choice

If merchandise sells for $3,500, with terms of 3/15, n/45, and the cost of the inventory sold is $2,100, the amount charged to sales is

• A) $3,395
• B) $3,500
• C) $2,037
• D) $2,100

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Definitions:

Return on Assets

A profitability ratio that measures how efficiently a company is using its assets to generate earnings.

Return on Debt

A measurement of a company's effectiveness in generating earnings from its debt, showing how well a company uses borrowed funds.

Cost of Equity

The return that investors expect for providing capital to a company, effectively the compensation for the risk of investing in the company.

Debt-Equity Ratio

An indicator of a business's financial risk, computed by dividing the total amount of its liabilities by the equity owned by shareholders.