A trade credit bill of $80,000 with terms of sale of 2/5, net 30 means the buyer saves ____ if the bill is paid within the discount period.
A) $400
B) $1,600
C) $2,500
D) $4,000

Question

Quizplus · Accepted Answer

The discount period is the period during which the buyer can take advantage of the cash discount offered by the seller. In this case, the discount period is 5 days. The buyer can deduct 2% ($1,600) from the bill if it is paid within the discount period. Therefore, the answer is B.

A Trade Credit Bill of $80,000 with Terms of Sale