2 percent discount
2/10 represents a 2 percent discount when payment is made to the supplier within 10 days of the credit sale. N30 or Net 30 represents the other option to pay the amount due in full within 30 days. The goal of 2/10 is to encourage early payment for credit sales.

What is the purpose of the 2/10 discount?

2/10 net 30 means a discount for payment within 10 days. The purpose of this is to shorten accounts receivable cycles for those who provide credit terms. This is essential when vendors have accounts receivable turnover cycles which exist longer than preferred.

What do the credit terms 2/10 net 30 mean?

2/10 net 30 is a trade credit offered by the seller to the buyer for their purchase. If a buyer is able to pay an invoice in full within the first ten days, they will receive a 2 percent discount on the net amount.

When a purchaser is offered credit terms of 1/10 n 30 The discount period is?

A 1%/10 net 30 deal is when a 1% discount is offered for services or products as long as they are paid within 10 days of a 30-day payment agreement. The cost of credit is used as a percentage and occurs when the buyer does not take the reduced cost, thus paying the higher cost, reflecting the discount loss.

When a purchaser is offered credit terms of 1/10 n 30 The discount period is quizlet?

A buyer who acquires merchandise under credit terms of 1/10, n/30 has 20 days after the invoice date to take advantage of the cash discount. Discounts taken by the buyer for early payment of an invoice are called sales discounts by the buyer.

What would be considered an expense for a merchandising firm?

Cost of Goods Sold is considered an expense of a merchandising firm. Operating expenses are subtracted from revenue for a service enterprise and from gross profit for a merchandising enterprise.

What is 2% 10th prox?

For example, “2% 10th Prox Net 30” means a 2 percent discount can be taken if the bill is paid before the 10th of the next month; otherwise, the full amount is due within 30 days.