Asked by Natalie James on May 20, 2024
Verified
Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?
A) $194, May 15
B) $194, May 16
C) $97, May 15
D) $97, May 16
Net 45
A payment term indicating that the full amount is due for payment 45 days after the invoice date.
Sales Discount
A reduction in the price of a product or service offered to customers to encourage prompt payment.
- Acquire knowledge on the merits of buying discounts and how they are calculated.
Verified Answer
NP
Nadya PolevaiaMay 25, 2024
Final Answer :
C
Explanation :
The discount is calculated as 1% of the total amount of the invoice:
Discount = $9,700 x 1% = $97
To take advantage of the discount, the invoice must be paid within 15 days from the invoice date, which is May 16.
Therefore, the correct answer is:
Discount: $97
Payment due date for discount: May 15
Discount = $9,700 x 1% = $97
To take advantage of the discount, the invoice must be paid within 15 days from the invoice date, which is May 16.
Therefore, the correct answer is:
Discount: $97
Payment due date for discount: May 15
Learning Objectives
- Acquire knowledge on the merits of buying discounts and how they are calculated.