### Understanding Credit TermsWhen dealing with invoices in a business setting, understanding credit terms is crucial. Credit terms define the payment expectations set by the supplier, detailing the amount of time the purchaser has to pay for the goods and any applicable discounts for early payment.In this example, the credit terms are expressed as 3/15, n/45. Let's break down what these terms mean and focus on what the number "3" represents.---**Multiple Choice Question:**In credit terms of 3/15, n/45, the "3" represents the:- a. full amount of the invoice- b. number of days in the discount period- c. number of days when the entire amount is due- d. percent of the available discount for early payment---### Detailed Explanation- **"3"** - This number represents the percentage discount available if the invoice is paid within the discount period.- **"15"** - This figure denotes the number of days within which the payment should be made to avail the discount.- **"n"** - Stands for net.- **"45"** - Indicates the total credit period, meaning the time frame within which the full payment is due, without any discount.---**Correct Answer:** The "3" in the credit terms 3/15, n/45 represents the **percent of the available discount for early payment**. **Answer Choice:** d. percent of the available discount for early payment

3/15 n/45 3: discount if paid within 15 days 15: period of discount validity n: no discount if paid…

Answered: In credit terms of 3/15, n/45, the "3"…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Find the cash discount and the net price on an invoice for RM580 dated April 17 with terms of 3/10, n/30 if the bill was paid April 26. Draw the “timeline” stated the initial date, the due date, and the day receives cash discount.
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Calculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance. (Round dollars to the nearest cent.) Annual Purchases Payments Monthly Periodic Finance New Previous Percentage Rate (APR) (as a %) Charge (in $) and Cash and Balance Balance Rate Advances Credits (in $) $2,450.00 $1,334.98 $400.00 4
With credit terms of 2/10, n/30, the discount rate for paying after 11th days should be_______. The first section of an income statement shows the ___________________ Gross profit will be presented in the income statement after ____________________. In perpetual method, _______________ will be credited if an item bought will be returned.
1. credit terms :1/15, n/45. how many days is the discount period? 2. credit terms :5, 1/15, n/45. what is the cash discount?
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In credit terms of 3/15, n/45, the "3" represents the Oa. full amount of the invoice Ob. number of days in the discount period Oc. number of days when the entire amount is due Od. percent of the available discount for early payment 4