Virginia Supply Offers Their Customers Trade Credit with Terms 2/15

question 138

Multiple Choice

Virginia Supply offers their customers trade credit with terms 2/15 net 30. This implies that:

• A) Virginia's customers have very little incentive to pay within the discount period.
• B) paying within 30 days will let a customer deduct 15% off the invoice price.
• C) most customers will pay their bill within 2 days in order to take the maximum discount.
• D) the annual financing cost of failing to pay within 15 days is about 48%.

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Definitions:

Damages

Monetary compensation awarded to a party in a lawsuit for loss or injury suffered due to another party's actions or breach of contract.

Reasonable Notice

The sufficient and fair amount of time one party must give another to prepare for or respond to an action, often legally defined in various contexts.

Termination

The act of ending or concluding an agreement, contract, or employment relationship.

Dismiss

To terminate or end something formally, such as employment or legal actions.