CMA Intermediate · Financial Management and Business Data Analytics · Payable Management
Sharma Traders buys goods from a supplier on terms 2/10, net 40. The invoice is for Rs 5,00,000. If Sharma pays on the 10th day and avails the discount, what amount does it pay?
Sharma pays Rs 4,90,000. The 2% cash discount on an invoice of Rs 5,00,000 is Rs 10,000, and paying within the 10-day discount period lets the buyer deduct it from the invoice amount.
- ARs 4,90,000Correct
- BRs 4,98,000
- CRs 5,00,000
- DRs 4,80,000
Explanation
Discount = 2% of 5,00,000 = Rs 10,000. Payment = 5,00,000 - 10,000 = Rs 4,90,000. Rs 4,98,000 wrongly applies 0.4% and Rs 4,80,000 applies 4%.
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