Question

The terms of sale 1/10, n/30 mean that the customer

a. may deduct 1% of the invoice amount if payable is made within 30 days
b. may deduct 1% of the invoice amount if payment is made within 30 days
c. may deduct 10% of the invoice if payment is made within 30 days
d. none of the above

Answer 1

The terms 1/10, n/30 mean the customer can take a 1% discount on the invoice if paid within 10 days, otherwise, the full amount is due within 30 days.

Step-by-step explanation:

The term 1/10, n/30 is a common credit term used in the field of business, particularly in invoicing and accounting practices. It refers to a sales discount and payment timing condition where:

• '1/10' means the buyer may take a 1% discount off the total invoice amount.
• 'n/30' means that the net amount of the invoice is due within 30 days.

So, the correct answer to what 1/10, n/30 means is that the customer may deduct 1% of the invoice amount if payment is made within 10 days. If the payment is not made within these 10 days, the full invoice amount is due within 30 days without any discount.