An invoice in the amount of $1,195.00 with credit terms of 2 / 10, 1 / 20, N / 30 is dated June 25. If it is paid on July 5, a discount of $23.90 is allowed.

Question

Quizplus · Accepted Answer

To calculate the discount, we need to use the credit terms given:

- 2/10 means a 2% discount is allowed if paid within 10 days 
- 1/20 means a 1% discount is allowed if paid within 20 days 
- N/30 means the full amount is due in 30 days

Since the invoice is dated June 25 and it is paid on July 5, this means it is paid within 10 days and the 2% discount applies.

Discount = $1,195.00 x 0.02 = $23.90

Therefore, the statement that a discount of $23.90 is allowed if paid on July 5 is true.

An Invoice in the Amount of $1,195