The following terms appeared on an invoice dated May 20 which was sent by a manufacturer to a retail store: 2/10, net 30. The amount of the invoice was $2,000. Assuming the retailer paid the invoice on May 30 (10 days after the products were delivered), how much should he have paid?
A) $1,900
B) $1,800
C) $2,000
D) $1,960
E) $2,040

Question

Quizplus · Accepted Answer

The terms "2/10, net 30" means that the retailer can take a 2% discount if they pay within 10 days, otherwise the full amount is due within 30 days.

Since the retailer paid on day 10, they can take the discount of 2% of the invoice amount, which is $2,000 x 0.02 = $40.

Therefore, the amount the retailer should have paid is $2,000 - $40 = $1,960.

The correct answer is D.

The Following Terms Appeared on an Invoice Dated May 20