The credit terms 2/10,n/30 are interpreted as:
A)2% cash discount if the amount is paid within 10 days,with the balance due in 30 days.
B)10% cash discount if the amount is paid within 2 days,with balance due in 30 days.
C)30% discount if paid within 2 days.
D)30% discount if paid within 10 days.
E)2% discount if paid within 30 days.

Question

Quizplus · Accepted Answer

The credit terms 2/10,n/30 indicate a 2% cash discount if the amount is paid within 10 days, with the balance due in 30 days. This means that the customer can take advantage of a discount of 2% if they pay their bill within 10 days, but if they do not pay within this time frame, they must pay the full amount within 30 days. Option B is incorrect because it offers a larger discount for a shorter period of time. Option C and D are incorrect because the discount percentage is too high and does not match the industry standard. Option E is incorrect because it does not offer a discount for early payment.

The Credit Terms 2/10,n/30 Are Interpreted As