{"id":184313,"date":"2025-01-20T18:41:42","date_gmt":"2025-01-20T18:41:42","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=184313"},"modified":"2025-01-20T18:41:45","modified_gmt":"2025-01-20T18:41:45","slug":"taking-advantage-of-a-2-10-n-30-purchases-discount-is-equal-to-a-savings-yearly-rate-of-approximately","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/01\/20\/taking-advantage-of-a-2-10-n-30-purchases-discount-is-equal-to-a-savings-yearly-rate-of-approximately\/","title":{"rendered":"Taking advantage of a 2\/10, n\/30 purchases discount is equal to a savings yearly rate of approximately"},"content":{"rendered":"\n
    \n
  1. Taking advantage of a 2\/10, n\/30 purchases discount is equal to a savings yearly rate of approximately
    A. 2%
    B. 24%
    C. 20%
    D. 36%<\/li>\n\n\n\n
  2. Who pays the freight costs when the terms are FOB shipping point?
    A. the ultimate customer
    B. the buyer
    C. the seller
    D. either the seller or the buyer<\/li>\n\n\n\n
  3. Who pays the freight cost when the terms are FOB destination?
    A. the seller
    B. the buyer
    C. the customer
    D. either the buyer or the seller<\/li>\n\n\n\n
  4. A retailer purchases merchandise with a catalog list price of $15,000. The retailer receives a 15% trade discount and credit terms of 2\/10, n\/30. How much cash will be needed to pay this invoice within the discount period?
    A. $15,000
    B. $14,700
    C. $12,750
    D. $12,495<\/li>\n\n\n\n
  5. What type of company would normally offer trade discounts to its customers?
    A. Service companies
    B. Retailers
    C. Wholesalers
    D. On-line retailers<\/li>\n\n\n\n
  6. Which of the following accounts will only be found in the chart of accounts of a merchandising company?
    A. Sales
    B. Accounts Receivable
    C. Merchandise Inventory
    D. Accounts Payable<\/li>\n\n\n\n
  7. Which of the following items would affect the cost of merchandise inventory acquired during the period?
    A. quantity discounts
    B. cash discounts
    C. freight-in
    D. all of these costs<\/li>\n\n\n\n
  8. If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer, the terms are
    A. consigned
    B. n\/30
    C. FOB shipping point
    D. FOB destination<\/li>\n\n\n\n
  9. If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are
    A. n\/30
    B. FOB shipping point
    C. FOB destination
    D. consigned<\/li>\n\n\n\n
  10. If the merchandise costs $5,000, insurance in transit costs $250, tariff costs $75, processing the purchase order by the purchasing department costs $25, and the company receiving dock personnel cost $20, what is the total cost charged to the merchandise?
    A. $5,325
    B. $5,370
    C. $5,350
    D. $5,000<\/li>\n<\/ol>\n\n\n\n

    The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n

    Correct Answers:<\/h3>\n\n\n\n

    141.<\/strong> D. 36%
    142.<\/strong> B. the buyer
    143.<\/strong> A. the seller
    144.<\/strong> D. $12,495
    145.<\/strong> C. Wholesalers
    146.<\/strong> C. Merchandise Inventory
    147.<\/strong> D. all of these costs
    148.<\/strong> D. FOB destination
    149.<\/strong> B. FOB shipping point
    150.<\/strong> C. $5,350<\/p>\n\n\n\n

    \n\n\n\n

    Explanation:<\/h3>\n\n\n\n

    141.<\/strong>
    The 2\/10, n\/30 discount means you save 2% by paying within 10 days instead of 30. To annualize this savings:<\/p>\n\n\n\n

      \n
    • The payment period saved is ( 30 – 10 = 20 ) days.<\/li>\n\n\n\n
    • Number of 20-day periods in a year = ( 365 \/ 20 = 18.25 ).<\/li>\n\n\n\n
    • Annual savings rate = ( 2\\% \\times 18.25 = 36.5\\% ), approximated to 36%<\/strong>.<\/li>\n<\/ul>\n\n\n\n

      142.<\/strong>
      FOB shipping point means the buyer takes ownership once goods leave the seller’s location. The buyer pays freight costs.<\/p>\n\n\n\n

      143.<\/strong>
      FOB destination means the seller retains ownership until the goods reach the buyer. The seller pays freight costs.<\/p>\n\n\n\n

      144.<\/strong>
      The retailer receives a 15% trade discount:
      ( \\$15,000 \\times 0.85 = \\$12,750 ).
      Paying within the 2% discount period reduces this further:
      ( \\$12,750 \\times 0.98 = \\$12,495 ).<\/p>\n\n\n\n

      145.<\/strong>
      Wholesalers often offer trade discounts to encourage bulk purchases by retailers.<\/p>\n\n\n\n

      146.<\/strong>
      Merchandise Inventory is specific to merchandising companies managing inventory for resale.<\/p>\n\n\n\n

      147.<\/strong>
      The total cost of merchandise inventory includes purchase costs, less discounts, plus freight-in and related costs.<\/p>\n\n\n\n

      148.<\/strong>
      Title passes to the buyer at delivery for FOB destination terms.<\/p>\n\n\n\n

      149.<\/strong>
      Title passes to the buyer at shipment for FOB shipping point terms.<\/p>\n\n\n\n

      150.<\/strong>
      Merchandise cost includes purchase price plus all costs to get the goods ready for use:<\/p>\n\n\n\n

        \n
      • Merchandise: \\$5,000<\/li>\n\n\n\n
      • Insurance: \\$250<\/li>\n\n\n\n
      • Tariff: \\$75<\/li>\n\n\n\n
      • Purchase processing: \\$25<\/li>\n\n\n\n
      • Receiving dock personnel: \\$20
        Total: \\$5,350.<\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

        The Correct Answer and Explanation is : Correct Answers: 141. D. 36%142. B. the buyer143. A. the seller144. D. $12,495145. C. Wholesalers146. C. Merchandise Inventory147. D. all of these costs148. D. FOB destination149. B. FOB shipping point150. C. $5,350 Explanation: 141.The 2\/10, n\/30 discount means you save 2% by paying within 10 days instead of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-184313","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/184313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=184313"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/184313\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=184313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=184313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=184313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}