BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$0.05
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$1.03
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$21.77
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$22.80
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Detailed explanation-1: -Another way of finding the net price is the complement method. The complement of your trade-discount rate is 100 percent minus the discount rate. This is sometimes called the net-price rate. You can multiply the list price by the complement to find the net price.
Detailed explanation-2: -Net price is what a customer pays. To calculate the net price, start with the list price and add any taxes and other government-mandated charges. Then subtract any discounts, rebates or negotiated prices.
Detailed explanation-3: -Trade discounts are usually based on the list price (catalogue price). Sales are recorded based on net price. Net price = List price – Trade discount. Therefore, trade discounts are not recorded in the books of accounts.
Detailed explanation-4: -5% is a trade discount that rewards a bulk payment. 5% is a cash discount that rewards an early invoice payment within 30 days.