Baker Corp.sold merchandise to a customer on credit.The invoice amount was $1,000; the invoice date was June 10; credit terms were 1/10, n/30.Which one of the following statements is true?

Question

Quizplus · Accepted Answer

The credit terms of 1/10, n/30 mean that the customer can take a 1% discount if the invoice is paid within 10 days (by June 20) or must pay the full amount within 30 days (by July 10). Therefore, if the invoice is paid on July 9 (one day before the 30-day deadline), the customer should pay the full $1,000 amount. Option A is incorrect because the discount can only be taken if paid within 10 days, not 20 days. Option C is incorrect because there is no penalty mentioned in the given credit terms. Option D is incorrect because it includes a penalty and does not take into account the discount option.