If an Organization Purchases $2,100 of Supplies on Account, with Terms

question 42

Multiple Choice

If an organization purchases $2,100 of supplies on account, with terms of 2/15, n50:

• A) $1,950 must be paid within 15 days of the invoice date.
• B) $2,094 must be paid within 50 days of the invoice date.
• C) $2,058 can be paid within 15 days of the invoice date, or $2,100 must be paid within 50 days of the invoice date.
• D)$2,058 can be paid within 15 days of the invoice date, or $2,142 must be paid within 50 days of the invoice date.

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Definitions:

Profit

The financial gain achieved when the revenue from sales or services exceeds the costs and expenses incurred in providing those sales or services.

Budgeted Fixed Overhead

The estimated amount of fixed costs that a business plans to incur over a certain period, usually for budgetary and planning purposes.

Production Activity

Processes involved in making goods, from raw materials to finished products.

Variable Costing

An accounting method where only variable production costs are included in product cost, with fixed overhead costs treated as period expenses.