Question

A sale on account of $1,000 offered within terms 2/10, n/30 means that he customers will get a 2% discount if payment is made within ___ days; otherwise, full payment is due within ___ days.

Answer 1

A sale with the term 2/10, n/30 means the customer can take a 2% discount if they pay within 10 days; otherwise, the full amount is due in 30 days.

Step-by-step explanation:

The terms 2/10, n/30 are commonly used in business to indicate a sales discount and credit term. This means that the customer will receive a 2% discount if payment is made within 10 days; otherwise, the full payment is due within 30 days. This type of incentive is designed to encourage early payment of accounts receivable and improve cash flow for the seller. Understanding these terms is crucial in both cost-saving for the buyer and cash flow management for the seller. These credit terms are part of invoicing practices where '2' stands for the discount percentage, '10' indicates the deadline in days for the discount to be applicable, and 'n/30' specifies that the net (full) amount is due within 30 days without any discount. Conclusion: In summary, the sales term 2/10, n/30 offers a cash flow advantage to both the buyer and seller, by allowing for a short-term discount in exchange for accelerated payment.