An invoice for $25,000 dated March 15 with terms 3/10, 2/20, n/30, ROG was received in the mail on March 18. The shipment of goods was received on April 3. A payment of $14,000 was made on April 14. How much was credited to the account?
A) $14,280.00
B) $14,420.00
C) $14,432.99
D) $14,285.71
E) $14,000.00

Question

Quizplus · Accepted Answer

The terms 3/10, 2/20, n/30, ROG indicate that a discount is available if the invoice is paid within certain days from the receipt of goods (ROG). Since the goods were received on April 3, the payment on April 14 is within the 10-day period for a 3% discount. Therefore, the payment of $14,000 is more than the discounted amount due. To find the credited amount: $14,000 / (1 - 0.03) = $14,000 / 0.97 = $14,285.71.

An Invoice for $25,000 Dated March 15 with Terms 3/10