If a supplier is offering trade credit of 1/10 net 30, and a buyer chooses not to take the discount, when should they pay, assuming that they wish to stay on good terms with the supplier?
A)any time before day 10
B)on day 30
C)any time after day 30
D)on day 10

Question

Quizplus · Accepted Answer

The buyer should pay on day 30 to stay on good terms with the supplier, as that is the end of the credit period. Choosing not to take the discount means that they forfeit the opportunity to save money, but they still have the obligation to pay within the agreed-upon credit terms. Paying before day 10 (option A) would result in the buyer not maximizing their working capital, and paying after day 30 (option C) would likely result in strained relations with the supplier. Paying on day 10 (option D) would be taking the discount and therefore not applicable to the scenario.

If a Supplier Is Offering Trade Credit of 1/10 Net