An invoice received from a supplier for $8,000 on January 1 with terms 1/15, n/30 means that the company should pay
A) $6,800 before January 16.
B) either $7,920 before January 16 or $8,000 before the end of the month.
C) $8,000 between January 2 and January 16.
D) $7,920 before the end of January.

Question

Quizplus · Accepted Answer

The terms 1/15, n/30 mean a 1% discount is available if paid within 15 days, otherwise, the full amount is due in 30 days. So, $7,920 (after 1% discount) if paid by January 16, or $8,000 by January 31.

An Invoice Received from a Supplier for $8,000 on January