Credit terms of a merchandising company are: 1/15, net 40. This means that the buyer can avail a discount of 1 percent, if the invoice is paid within 40 days of the invoice date.

Question

Quizplus · Accepted Answer

The terms 1/15, net 40 mean that the buyer can avail a 1% discount if the invoice is paid within 15 days, not 40 days. The full amount is due in 40 days if the discount is not taken.

Credit Terms of a Merchandising Company Are: 1/15, Net 40