Explanation Sales discount: Sales discount is the cash discount given by the seller to the buyer if the amount is paid within the specific period of time. The “2/10” states that if the payment is made by the buyer within the 10 days after date of sales, 2% of discount is deducted from the selling price...

6th Edition

ISBN: 9781260159516

Author: PHILLIPS

Publisher: MCG

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Chapter 6, Problem 6MC

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The meaning of sales discounts with terms 2/10, n/30.

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Chapter 6, Problem 5MC

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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.

6. The purchasing document should also specify when payment is due. This is usually expressed as a net number of days, such as Net 30 or Net 45. A discount period may be included where the supplier specifies the amount of the discount as well as the number of days the buyer can make payments and still earn the discount. The discount period is often expressed as a formula: 2/20 Net 45

What do the credit terms, 2/15, n/30 mean? Multiple Choice O A two percent discount can be deducted if the invoice is paid after the fifteenth day following the sale, but before the thirtieth day. A two percent discount can be deducted if the invoice is paid before the fifteenth day following the date of the sale. A fifteen percent discount can be deducted if the invoice is paid within two days following the date of sale. A two percent discount can be deducted for a period up to thirty days following the date of sale.

Chapter 6 Solutions

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The meaning of sales discounts with terms 2/10, n/30.

Solution Summary: The author explains the meaning of sales discounts with terms 2/10, n/30. Option (b) 2 percent discount for payment received within 10 days or the full amount is due within 30 days.

The meaning of sales discounts with terms 2/10, n/30.

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