CIMA BA3 · Chapter 4 · Question 10 of 10
Goods with a list price of $8,000 are sold to a trade customer who receives a 15% trade discount. Sales tax at 20% is charged. What is the total amount shown on the invoice?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $8,160
Explanation
Trade discount is deducted before anything is recorded: $8,000 x 85% = $6,800. Sales tax is calculated on the discounted price: $6,800 x 20% = $1,360. Invoice total = $6,800 + $1,360 = $8,160.
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