When Goods Are Sold to a Customer with Credit Terms

question 37

Multiple Choice

When goods are sold to a customer with credit terms of 2/15, n/30, the customer will receive which of the following?

• A) A 15% discount if they pay within 30 days.
• B) A 15% discount if they pay within 2 days.
• C) A 2% discount if they pay within 15 days.
• D) A 2% discount if they pay 15% of the amount due within 30 days.

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Definitions:

Shareholders

Owners of shares in a corporation, holding a portion of the business's stock, and therefore having rights to dividends and a say in company matters.

Corporation

A legal entity recognized by law as separate from its owners, with its own rights, privileges, and liabilities.

S Corporation Election

A tax status election made by a corporation with the Internal Revenue Service to be taxed as a pass-through entity, avoiding double taxation on corporate income.

Shareholders' Consent

The approval or agreement by shareholders, often required for major company decisions, typically obtained through voting mechanisms.