5.2 CASH DISCOUNTS AND TERMS OF PAYMENT

5.2 CASH DISCOUNTS AND TERMS OF PAYMENT - Page 1 of 4 5.2...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Page 1 of 4 5.2 CASH DISCOUNTS • Cash discounts are not to be confused with trade discounts on list prices. • Apply any trade discounts first on the list price before applying any cash discounts • The invoice is a record of sale that is sent to the purchaser for the goods that they buy. • Cash discounts are offered by the seller to the purchaser as a reduction on the amount of the invoice that must be paid to encourage prompt payment of the invoice. . A) ORDINARY DATING Example 1: An invoice of $1000 is dated June 22 with terms “3/15, n/30”. 3/15 → There is a 3% cash discount if the invoice is paid within 15 days of invoice date. n/30 → The due date is 30 days after the invoice date (overdue charges may appy) Invoice End of Due Date 3% Discount Date |__________________|_________________________________________| Discount period 15 days _________________________ Credit period _______________________ 30 days (USE THE DAY OF THE YEAR CALENDAR) Invoice date is June 22 = day _______...
View Full Document

{[ snackBarMessage ]}

Page1 / 4

5.2 CASH DISCOUNTS AND TERMS OF PAYMENT - Page 1 of 4 5.2...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online