Which Statement Below Best Explains the Credit Terms of 2/15,n/30

question 104

Multiple Choice

Which statement below best explains the credit terms of 2/15,n/30?

• A)The buyer will receive a 15 percent discount if it pays within two days of the purchase.
• B)The buyer will receive a 15 percent discount if it pays within thirty days.
• C)The buyer will receive a 2 percent discount if it pays within fifteen days.
• D)The buyer will receive a 2 percent discount if it pays within thirty days.

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Definitions:

Overhead Costs

Expenses related to the general operation of a business that are not directly tied to the production of goods or services, such as utilities and administrative salaries.

Work in Process Account

An account used to record the costs associated with incomplete products, including labor, material, and overhead costs.

Job Order Costing System

An accounting system used to assign costs to specific jobs or batches, typically useful in manufacturing or service industries with unique or custom orders.

Service Organizations

Service organizations are businesses that primarily provide intangible products, such as services or expertise, to customers.