A supplier invoice is $48,000 with a 2 percent discount if paid within the discount period. What discounted payment amount applies?
Correct Answer
B) $47,040
The discount is $48,000 x 2% = $960, so the payment is $48,000 - $960 = $47,040. Other choices use a 1% discount, add the discount, or report only the discount amount.
Why This Is the Correct Answer
The discount is $48,000 x 2% = $960, so the payment is $48,000 - $960 = $47,040. Other choices use a 1% discount, add the discount, or report only the discount amount.
Why the Other Options Are Wrong
Option A: $960
early payment discount, choice a: $960 is wrong because $960 counts a different spacing, panel, or repeated member quantity.
Option C: $47,520
early payment discount, choice b: $47,520 counts a different spacing, panel, or repeated member quantity.
Option D: $48,960
early payment discount, choice c: $48,960 counts a different spacing, panel, or repeated member quantity.
Memory Technique
Picture a label labeled early payment discount: finish every operation before accepting $47,040.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "Vendor discount calculation" to confirm that The discount is $48,000 x 2% = $960, so the payment is $48,000 - $960 = $47,040.
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