To Obtain the Maximum Possible Benefit from a Cash Discount

question 24

Multiple Choice

To obtain the maximum possible benefit from a cash discount of 2/10, n/30, the buyer should pay the invoice:

• A) immediately.
• B) when the seller threatens legal action.
• C) at the end of the month to receive a 7% discount.
• D) on the last day of the discount period, i.e. in 10 days, to receive a 2% discount.

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Definitions:

Federal

Pertaining to a system of government where power is divided between a central authority and constituent political units, such as states or provinces.

Unitary

A system of government where all the powers rest in a single, central authority.

Confederal

A confederal system, also denoted, is a political structure where independent states join together for certain purposes but maintain their sovereignty, often seen in the handling of common defense or foreign policy.

Sovereign Powers

The ultimate authority or power of a state to govern itself or another state, including making and enforcing laws, without external interference.