What Does "2/10" Mean,with Respect to "Credit Terms of 2/10,n/30

question 16

Multiple Choice

What does "2/10" mean,with respect to "credit terms of 2/10,n/30"?

• A) A discount of 2 percent will be allowed if the invoice is paid within 10 days of the invoice date.
• B) Interest of 2 percent will be charged if the invoice is paid after 10 days from the date on the invoice.
• C) A discount of 10 percent will be allowed if the invoice is paid within two days of the invoice date.
• D) Interest of 10 percent will be charged if invoice is paid after two days.

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Definitions:

File Jointly

The process by which a married couple combines their income and deductions to file a single tax return.

Adjusted Gross Income

Total income minus specific deductions, used to determine taxable income on an individual's tax return.

Medicare Withholding

The portion of an individual's income that is deducted for Medicare, which is a form of health insurance typically for individuals aged 65 and older.

FSA

A Flexible Spending Account, which is a special account used for setting aside pre-tax dollars for eligible healthcare and dependent care expenses.