Which statement best describes the meaning of '3/10 net 30' terms?

• A. A 3% discount is allowed if payment is made within 10 days; otherwise the net amount is due in 30 days
• B. A 3% discount if paid in 30 days; net due in 10 days
• C. Net 3% due in 10 days; 30 days payment not allowed
• D. Payment due in 3 days with 10% late fee

Answer: (A)

3/10 net 30 means you get a 3% discount if you pay within 10 days of the invoice date, otherwise the full invoice amount is due by day 30. In practice, the discount typically applies to the merchandise price (not usually taxes or shipping unless specified). For example, on a $1,000 invoice, paying within 10 days would cost $970; paying after 10 days but by day 30 would still require $1,000. If payment isn’t made by day 30, late fees or interest may apply. This reflects the idea of an incentive for early payment paired with a final due date for the full amount.