On September 1,a firm grants credit with terms of 2/10 net 30.The creditor:
A)must pay a penalty of 2/10 of one percent when payment is made later than October 1.
B)must pay a penalty of 10 percent when payment is made later than 2 days after October 1.
C)receives a discount of 2 percent when payment is made at least 10 days prior to October 1.
D)receives a discount of 2 percent when payment is made on September 1 and pays a penalty of 10 percent if payment is made after October 1.
E)receives a discount of 2 percent when payment is made within 10 days.

Question

Quizplus · Accepted Answer

The terms "2/10 net 30" mean that the buyer can take a 2 percent discount on the invoice amount if the payment is made within 10 days of the invoice date. If the payment is not made within this discount period, the net (full) amount is due 30 days from the invoice date.

On September 1,a Firm Grants Credit with Terms of 2/10