Jacobson Landscaping receives an invoice from one of its suppliers.The amount of the invoice is $30,000 with terms of 2/10, net/30.If the invoice is paid on the fifth day, Jacobson is entitled to a ____ cash discount and will write the check for ____.
A) $6; $29,994
B) $600; $29,400
C) $600; $0
D) $6,000; $29,400
E) $6,000; $0

Question

Quizplus · Accepted Answer

The terms 2/10 mean that if the invoice is paid within 10 days, there is a 2% discount. Therefore, if the invoice is paid on the fifth day, Jacobson is entitled to a $600 cash discount ($30,000 x 0.02). The amount of the check will be $29,400 ($30,000 - $600).

Jacobson Landscaping Receives an Invoice from One of Its Suppliers