Question

Mrs. thomas has received an invoice from the manufacturer for which she distributes products. the invoice states credit terms of 3/10, n/30. puzzled by this, she calls on you to explain. you indicate that the notation 3/10 means that

Answer 1

An invoice that states credit terms of 3/10, n/30 means:

• if the buyer pays within a 10 day period, the seller is willing to give her a 3% discount on the invoice amount.
• if the buyer pays later than 10 days but before a 30 day period, she should pay the face amount of the invoice.
• if the buyer pays later than 30 days, the seller might add some interest charges to the invoice.

Step-by-step explanation:

Answer 2

The 3/10 indicated as the credit terms mean that the manufacturer is willing to give Mrs. Thomas a 3% discount from the remaining payable amount if she will be able to pay within 10 days from the receipt of the invoice.