Credit terms of 1/5,net 15 should be interpreted as granting:
A)a 1/5 percent discount for payments within 15 days.
B)a five percent discount for next day payments.
C)a total credit period of 20 days.
D)a credit period of 10 days.
E)a one percent discount for payments received within five days.

Question

Quizplus · Accepted Answer

The terms "1/5, net 15" mean that the buyer can take a one percent discount on the invoice amount if the payment is made within five days; otherwise, the full amount is due within 15 days.

Credit Terms of 1/5,net 15 Should Be Interpreted as Granting