What Is the Meaning of the Term '2/10 Net 30

question 94

Multiple Choice

What is the meaning of the term '2/10 net 30'?

• 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 10 days, a 2% 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 the full invoice is due in 30 days.
• D)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.

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Definitions:

Statement Of Cash Flows

Explains how the company’s cash changed from the beginning of the accounting period to the end.

Accounting Period

A specific period of time used for financial reporting purposes, typically a year or quarter.