Asked by James Stupin on May 16, 2024
Verified
Kaden Co. sells merchandise on credit to Jase Co. for $9,600. The invoice is dated July 15 with terms of 1/15, net 45. If Jase Co. chooses not to take the discount, by when should the payment be made?
A) July 30
B) August 29
C) August 15
D) July 25
Net 45
A payment term indicating that the full payment is due 45 days from the invoice date.
Credit Terms
The conditions under which a seller extends credit to a buyer, detailing the repayment time frame, interest rate, and penalties for late payment.
- Gain insight into the advantages of purchase discounts and the process for determining them.
Verified Answer
TB
Tatum BrannanMay 17, 2024
Final Answer :
B
Explanation :
The terms 1/15, net 45 mean that if Jase Co. pays within 15 days, they get a 1% discount. If they choose not to take the discount, the full payment is due within 45 days.
If Jase Co. chooses not to take the discount, they need to pay the full amount within 45 days from the invoice date.
July 15 + 45 days = August 29
Therefore, the payment should be made by August 29, making option B the correct answer.
If Jase Co. chooses not to take the discount, they need to pay the full amount within 45 days from the invoice date.
July 15 + 45 days = August 29
Therefore, the payment should be made by August 29, making option B the correct answer.
Learning Objectives
- Gain insight into the advantages of purchase discounts and the process for determining them.