A Firm That Offers Payment Terms of 2/10 Net 30

Multiple Choice

A firm that offers payment terms of 2/10 net 30 gives its customers:

A) a 2% discount if the bill is paid on or before Day 30, otherwise an additional cost of 10% is applicable.
B) a 20% discount if the bill is paid on or before Day 10, otherwise the entire bill is due by Day 30.
C) a 30% discount if the bill is paid on or before Day 10, otherwise the entire bill is due by Day 2 of the consecutive month.
D) a 10% discount if the bill is paid on or before Day 2, otherwise the entire bill is due by Day 30.
E) a 2% discount if the bill is paid on or before Day 10, otherwise the entire bill is due by Day 30.