Acompany using the perpetual inventory system purchased inventory worth $25,000 on account with terms of 2/10, n/30. defective inventory of $2,000 was returned 2 days later and the accounts were appropriately adjusted. if the invoice is paid within 10 days, the amount of the purchase discount that would be available to the company is

10)
a) $460

b) $500

c) $490

d) $540

The amount of the purchase discount that would be available to the company is A) $460

Explanation:

The terms of 2/10, n/30 means 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

The company  purchased inventory worth $25,000 and $2,000 of the inventory was returned 2 days later.

The amount of the payable = $25,000 -  $2,000 = $23,000

The company paid within 10 days, early enough to receive discount.

The amount of the purchase discount = $23,000 x 2% = $460