Vern Corp.sold merchandise to a customer on credit.The invoice amount was $2,000; the invoice date was June 10; credit terms were 1/20, n/30.Which one of the following statements is true?

Question

Quizplus · Accepted Answer

The credit terms of 1/20, n/30 mean that the customer can take a 1% discount if payment is made within 20 days (by June 30), or pay the full amount within 30 days (by July 10) without penalty. Therefore, if the customer pays on July 9, they are still within the 30-day period and do not incur any penalty, but they also do not qualify for the discount. The correct amount to be paid on July 9 would be the full invoice amount of $2,000.

Vern CorpSold Merchandise to a Customer on Credit