Question

If merchandise is sold on account to a customer for $10,000, terms FOB shipping point, 1/10, n/30, what is the amount of the discount for early payment?

A) $100
B) $50
C) $150
D) $300

Answer 1

The amount of the discount early payment on merchandise sold on account for $10,000 with terms 1/10, n/30 is 1% of the total amount for early payment is $100.

Step-by-step explanation:

The terms FOB shipping point, 1/10, n/30 means that the customer is responsible for paying for the shipping and the seller offers a 1% discount if the payment is made within 10 days. The full payment is due within 30 days.

So, if the merchandise is sold for $10,000, the discount for early payment would be $10,000 * 1% = $100.

Therefore, the correct answer is A) $100.