What credit terms allow a discount of 3% if payment is made within 15 days from the date of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from its date?

Question

Business

Nico Hull

20 July, 09:32

What credit terms allow a discount of 3% if payment is made within 15 days from the date of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from its date?

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Answers (1)

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Jonathan Bolton · Answer 1

The example above clearly illustrates Cash discount

Explanation:

Cash discount is when a trading organisation offers discount for early payment or liquidation of debt. This is aimed at reducing recievables or debt as well as increasing cash asset.