What Do Credit Terms of 2/10, N/30 Indicate

question 154

Multiple Choice

What do credit terms of 2/10, n/30 indicate?

• A) Two percent discount for early payment is available if the invoice is paid before the tenth day of the month following the month the sale.
• B) Two percent discount for early payment is available within ten days of the invoice date.
• C) Ten percent discount for early payment is available if the invoice is paid within two days of the date of the invoice.
• D) Two percent discount for early payment is available if the invoice is paid after the tenth day, but before the thirtieth day of the invoice date.

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Definitions:

Indirect Method

A way to report net cash flow from operating activities in the statement of cash flows by starting with net income and adjusting for non-cash transactions.

Crown Property

Assets owned by the monarch or government of a realm, particularly in commonwealth countries, often including lands, buildings, and heritage assets.

Statement Of Financial Position

A financial statement that shows the assets, liabilities, and equity of a company at a specific point in time, providing a snapshot of its financial condition.

Fair Market Value

The price that an asset would sell for on the open market, under current market conditions, between willing and knowledgeable parties.