The following terms appeared on an invoice dated May 20 which was sent by a manufacturer to a retail store: 2/10, net 30. The amount of the invoice was $2,000. Assuming the retailer paid the invoice on June 1 (10 days after the products were delivered), how much should he have paid?
A) $1,900
B) $1,800
C) $2,000
D) $1,960
E) $2,040

Question

Quizplus · Accepted Answer

2/10, net 30 is a common payment term that means the buyer can take a 2% discount if payment is made within 10 days, otherwise the full amount is due in 30 days.

In this case, the retailer paid on June 1, which was within the discount period, so they can take the 2% discount.

Discount = $2,000 * 2% = $40
Amount due after discount = $2,000 - $40 = $1,960.

Therefore, the retailer should have paid $1,960.

The Following Terms Appeared on an Invoice Dated May 20