The net credit period for a company with terms of 3/15 net 40 is:
A)15 days
B)25 days
C)40 days
D)55 days

Question

Quizplus · Accepted Answer

The first number in the terms, 3, represents the discount percentage offered if payment is made within that number of days (in this case, within 3 days). The second number, 15, represents the net credit period, or the number of days before payment is due (in this case, 15 days). The third number, 40, represents the maximum credit period, or the number of days before payment is considered overdue and subject to penalties (in this case, 40 days). Therefore, the net credit period for this company is 15 days.

The Net Credit Period for a Company with Terms of 3/15