Which of the following credit terms allows a discount of 4% if payment is made within 20 days of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from the date of the invoice?

Question

Quizplus · Accepted Answer

The credit terms described in option C are 4/20, n/30. This means that a discount of 4% can be taken if payment is made within 20 days of the invoice date. If payment is not made within 20 days, the full amount is due within 30 days of the invoice date. Option A (4/20, EOM) and Option B (4/EOM, n/30) are not correct because they do not clearly state that payment must be made within 30 days if the discount is not taken. Option D (20/4, n/30) is incorrect because it is not a valid credit term.

Which of the Following Credit Terms Allows a Discount of 4