Which One of the Following Statements Is Correct If You

question 40

Multiple Choice

Which one of the following statements is correct if you purchase an item with credit terms of 1/5,net 15?

• A)If you pay within 1 day, you will receive a 5 percent discount.
• B)If you pay within 5 days, you will receive a 1 percent discount.
• C)If you do not pay within 15 days, you will be charged interest at a 1.5 percent monthly rate.
• D)If you pay within 15 days, you will receive a 1/5^th percent discount.
• E)You must pay the discounted amount within 15 days.

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Definitions:

Current Liabilities

Obligations or debts that are due to be paid within one year or within the normal business cycle.

Working Capital

the difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency.

Industry Figures

Statistical data or benchmarks pertaining to a specific industry, used for comparison or analysis.

Common-Sized Financial Statement

A financial statement that presents all line items as a percentage of a common base figure, facilitating comparison with other companies or time periods.