When Must a Vendor Be Paid in Full Under the Terms

question 29

Multiple Choice

When must a vendor be paid in full under the terms of 2/10, n. 30?

• A)10 days from today
• B)On February 10th
• C)On the 30th of the current month
• D)30 days from today

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Definitions:

Bond Issue

The process by which a borrower issues bonds to raise funds from investors willing to lend them money for a certain period.

Operating Leverage (DOL)

Operating leverage measures how revenue growth translates into growth in operating income. It is a measure of how sensitive the operating income is to the change in revenues.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.

Variable Cost

A cost that changes with the level of output or production, such as materials and labor costs.