Which Statement Is True About Terms of Trade Credit of 2/10,net

question 101

Multiple Choice

Which statement is true about terms of trade credit of 2/10,net 30?

• A) A 10% cash discount is offered for payment before 30 days.
• B) A 2% cash discount can be taken for payment before the 10^th of the following month.
• C) A 10% cash discount can be taken if paid by the second day after invoicing.
• D) No cash discount is offered after the eleventh day.

---

Definitions:

Sales Commissions

Payments made to sales employees as a percentage of the sales they generate, used as an incentive to drive sales.

Quantity Discounts

Price reductions offered to customers for purchasing goods or services in large quantities.

Periodic Inventory System

A method of inventory valuation for financial reporting purposes where a physical count of the inventory is taken at specific intervals.

Perpetual Inventory System

An inventory management approach where transactions are recorded in real-time, immediately affecting the inventory account.