Credit Terms of 2/10,n/30 Mean That the Purchaser May Deduct

question 22

True/False

Credit terms of 2/10,n/30 mean that the purchaser may deduct 2 percent if the invoice is paid within 10 days,with the full amount due in 30 days if the early payment option is NOT exercised.

---

Definitions:

Unfavorable Activity Variance

This term describes a situation where actual costs exceed the standards or budgeted amounts, leading to a negative variance.

Static Planning Budget

A budget based on a fixed level of activity, without adjusting for any variations in actual performance, useful for initial planning.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, revenue, or other factors influencing budgeting.

Static Budget

A financial plan that does not change or adjust over the period, regardless of any changes in business activity levels.