A Trade Credit Discount Such as 2/10 Net 40 Means

question 142

Multiple Choice

A trade credit discount such as 2/10 net 40 means

• A) a 2 percent penalty is due after 40 days.
• B) a 2 percent discount if payment is made within 10 days, otherwise, the total amount is due in 40 days.
• C) a 2 percent discount for payment within 10 days, and a 3 percent penalty if payment is made after 40 days.
• D) 10 percent discount for cash on delivery and a 2 percent discount for payment within 40 days.

---

Definitions:

Minimum Reading

The lowest value or measurement that can be accurately read or determined by a given instrument or method.

Universal Motor

An electric motor that can operate on either AC or DC power, commonly found in household appliances.

Wound Armature

An armature with coils wound around its laminated core, typically part of an electric machine, that interacts with the magnetic field to generate motion or electricity.

Compensating Winding

A winding used in electrical machines to reduce unwanted effects of armature reaction, improving performance.