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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 _______...
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- Winter '12
- 1966, 1969, 1979, 1965