Net Method: Net method refers to recording an invoice at discounted price. If the payment is made within the time frame of availing discount then the net price receivable is to be credited and the amount so received is to be debited. If the customer fails to do so then the discount so availed will be credited and amount so receivable will be debited. Term 3/15, n/45: Term 3/15, n/45 means that if the customer pays within 15 days then a discount of 3% will be given, otherwise full price is due within 45 days. To pass the journal entries at the respective date.

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Chapter 7, Problem 3BE

To determine

Net Method: Net method refers to recording an invoice at discounted price. If the payment is made within the time frame of availing discount then the net price receivable is to be credited and the amount so received is to be debited. If the customer fails to do so then the discount so availed will be credited and amount so receivable will be debited.

Term 3/15, n/45: Term 3/15, n/45 means that if the customer pays within 15 days then a discount of 3% will be given, otherwise full price is due within 45 days.

To pass the journal entries at the respective date.

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