Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

A business is already overdrawn at the bank by $4800. It pays for materials on an invoice of $3000, after a trade discount of $20\%$ and a settlement discount of $5\%$. A cheque for $500 is received from a credit customer. What is the bank balance after these transactions?

  • A$2020 overdraft
  • B$6580 overdraft
  • C$7150 overdraft
  • D$7580 overdraft

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