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A Customer Purchases $500 of Goods and Receives Credit Terms

Question 359

Multiple Choice

A customer purchases $500 of goods and receives credit terms of 2/10, net 20. The credit terms are defined as:

A) Ten percent discount if paid in two days, otherwise payable in full after a total of thirty days.
B) Two percent discount if paid in ten days, otherwise payable in full after a total of thirty days.
C) Two percent penalty imposed if paid more than ten days after the due date, which is twenty days from date of sale.
D) Two percent discount if paid in ten days, otherwise payable in full in twenty days.
E) Two percent discount on ten percent of the sale if the bill is paid in twenty days.

Correct Answer: