Question

Under the trade credit terms 3/10 Net 40, which of the following statements is correct?

Q: Answer-Under the trade credit terms 3/10 Net 40, which of the following statements is correct?

In trade credit terms, the format is Discount Discount Period in Days Net Total Credit Period in Days. Thus, 310Net 40 implies a 3 discount for payment within 10 days, and the net balance is due in full within 40 days.

A The customer gets a 3% cash discount if payment is made after 40 days.

B The customer must pay 3% interest if payment is deferred up to 10 days.

C The customer gets a 3% cash discount if paid within 10 days; otherwise, the full amount is due in 40 days.

D The customer gets a 10% cash discount if paid within 3 days, with a net period of 40 days.

E The customer gets a 3% cash discount if paid within 40 days, but must pay a 10% penalty thereafter.

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Under the trade credit terms 3/10 Net 40, which of the following statements is correct?

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