Under terms 2/5, net 30, which statement is true?

Prepare for the AAMI Small Business Management Test with flashcards and multiple choice questions; each question comes with hints and explanations. Get exam ready!

Multiple Choice

Under terms 2/5, net 30, which statement is true?

2/5, net 30 means you can take a 2% discount if you pay within five days; otherwise the full amount is due in 30 days. So the true statement is that a 2% discount applies if paid within five days. For example, on a $1,000 invoice, paying within five days would cost $980, while paying after five days but by day 30 would require $1,000. The discount window is five days, not ten, and there is no discount option outside that window.

2/5, net 30 means you can take a 2% discount if you pay within five days; otherwise the full amount is due in 30 days. So the true statement is that a 2% discount applies if paid within five days. For example, on a $1,000 invoice, paying within five days would cost $980, while paying after five days but by day 30 would require $1,000. The discount window is five days, not ten, and there is no discount option outside that window.

More practice questions