Question

Mrs. Matthews has received an invoice from the manufacturer for which she distributes products. The invoice states credit terms of 3/10, net/30. Puzzled by this, she calls on you to explain. You indicate that the notation 3/10 means that_____________.
A) she may take a 30 percent discount if she pays the invoice within three days.
B) she must pay the entire amount in three days.
C) after three days, she must pay the new amount in ten days.
D) her line of credit is equivalent to three-tenths of the dollar value of her business.
E) she may take a 3 percent discount if she pays the invoice within ten days.

Answer 1

Answer:

E) She may take a 3 percent discount if she pays the invoice within ten days.

Explanation:

Net30: net/30 is a type of trade credit where the buyer must pay within 30 days of the purchase. Traders usually offer discounts so that buyer pays the amount earlier than the time of payment.

Example: Notation 3/10 on the invoice means the customer will be given 3% discount if he/she pays within 10 days.