A wholesaler your pharmacy orders medical devices from has a policy of offering a discount on invoices paid in full, within 5 business days
of receipt. The discount is 10%, or 15% on orders over one thousand
dollars. On Wednesday July 6, an order totaling $1,489.36 was received.
Accounting electronically paid the invoice the following Tuesday. What
amount should they have paid?
A. $1,489.36 B. $1,340.42 C. $1,265.96 D. $1,305.69
How to solve:
1) The first issue to determine in this question is if the bill was paid within the 5 business days.
Business days are weekdays that don't fall on a federally designated holiday.
So, let's look on a calendar to see if accounting paid in time to get the discount:
In the business world, The day an order arrives does not count toward the billing business days.
So, in this case, it was paid in time to get the discount.
2) The question states the discount will be 15%, since the order is OVER $1,000.
On a calculator, figure out what 15% is.
Always round up to the nearest cent during this type of calculation.