On September 1, a firm grants credit with terms of 2/10 net 30. The creditor: re

Question

On September 1, a firm grants credit with terms of 2/10 net 30. The creditor:

receives a discount of 2 percent when payment is made within 10 days.

receives a discount of 2 percent when payment is made at least 10 days prior to October 1.

must pay a penalty of 2/10 of one percent when payment is made later than October1.

receives a discount of 2 percent when payment is made on September 1and pays a penalty of 10 percent if payment is made after October 1.

must pay a penalty of 10 percent when payment is made later than 2 days after October 1.

Explanation / Answer

Thed terms 2/10 net 30 implies that if the creditors make payments within 10 days he will get the discount of 2 % otherewise he can pay within 30 days but no discount will be given

Hence,

The correct option is

A. receives a discount of 2 percent when payment is made within 10 days

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