A Retailer Purchases Merchandise with a Catalog List Price of $25,000

question 148

Multiple Choice

A retailer purchases merchandise with a catalog list price of $25,000. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to the Merchandise Inventory account?

• A) $7,500
• B) $17,500
• C) $25,000
• D) $17,250

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Definitions:

Wage Rate

Wage Rate represents the standard amount of compensation a worker receives for performing a specific task or job, typically expressed per hour or per unit of work completed.

Marginal Expenditure

The additional cost incurred for producing one more unit of a good or service.

Average Expenditure

Price paid per unit of a good.

Competitive Buyer

A buyer in a market who has no influence on the market price and must accept the market price as given.