If the terms of a business exchange are 2/10 net 30, this means that the transaction
A)involves a quantity discount if paid in 30 days.
B)involves a transfer discount.
C)offers a discount if the buyer lives within a ten-mile radius.
D)price does not include the cost of freight.
E)involves a cash discount if paid within ten days.

Question

Quizplus · Accepted Answer

The terms "2/10 net 30" indicate that the buyer can receive a 2% discount if payment is made within 10 days, but the full amount is due within 30 days. This is a cash discount offered to encourage prompt payment.

If the Terms of a Business Exchange Are 2/10 Net