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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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This note was uploaded on 04/04/2012 for the course MATH 1052 taught by Professor Kit during the Winter '12 term at Fanshawe.
- Winter '12