Question

An invoice was received for $5100 dated June 21 with terms 2/10, n / 30.

What is the last day for taking the cash discount?

a) July 1

b) July 10

c) July 20

d) July 21

Answer 1

The last day to take the cash discount for the invoice dated June 21 with terms 2/10, n/30 is July 1.

Step-by-step explanation:

The student's question deals with interpreting the terms of an invoice and calculating the discount period. The terms 2/10, n/30 mean that the buyer can take a 2% discount on the invoice price if the invoice is paid within 10 days, otherwise the net amount is due in 30 days. Since the invoice is dated June 21, we add 10 days to find the last day to take the discount. The 10th day from June 21 is July 1, which means July 1st is the last day to take advantage of the cash discount.