What Does the Term 2/10 Net 30 Mean

question 35

Multiple Choice

What does the term 2/10 net 30 mean?

• A) If the invoice is paid within 10 days a 2% discount can be taken. If the invoice is paid between 11 and 29 days a 1% discount can be taken. After 30 days the full invoice is due.
• B) If the invoice is paid within 2 days a 10% discount can be taken, otherwise the full invoice is due in 30 days.
• C) If the invoice is paid within 2 days a 10% discount can be taken, otherwise a 2% discount can be taken if the invoice is paid in 30 days.
• D) If the invoice is paid within 10 days a 2% discount can be taken, otherwise the full invoice is due in 30 days.

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Definitions:

Prior Service Credit

A pension plan feature that grants employees credit for service periods before the commencement of the pension plan, affecting their benefits.

Defined Benefit Pension Plan

A retirement plan where the benefits that an employee will receive upon retirement are defined based on a formula considering factors such as salary history and duration of employment.

Service Cost

The portion of the pension expense that is recognized for the increase in pension benefits related to employee services of the current period.