If the Terms of a Business Exchange Are 2/10 Net

question 27

Multiple Choice

If the terms of a business exchange are 2/10 net 30, this means that the transaction

• A) involves a cumulative discount if paid in 30 days.
• B) involves a noncumulative discount.
• C) offers a discount if the buyer lives within a ten-mile radius.
• D) price does not include the cost of freight.
• E) involves a cash discount if paid within ten days.

---

Definitions:

Consolidated Financial Statements

Combined financial statements of a parent company and its subsidiaries, presenting the financial position and results of operations as a single entity.

Information Overload

A situation where an individual is exposed to more information than they can effectively process or manage.

Excess Cash

Surplus funds that exceed the normal operating needs of a business, often invested in short-term securities or used for acquisitions.

Fair Value Adjustment

An accounting process of updating the reported value of an asset or liability to reflect its current market value.