A cash discount of 3/15, net 30 means that:
A) The buyer gets a 15 percent discount off the face value of the invoice if the invoice is paid within 3 days.
B) The buyer gets a 3 percent discount off the face value of the invoice if the invoice is paid within 15 days.
C) The buyer makes a 3 percent down payment on the face value of the invoice within 15 days; the remainder is due in 30 days.
D) The buyer gets a 3/15 (20 percent) discount if the invoice is paid within 30 days.
E) None of these alternatives is correct.

Question

Quizplus · Accepted Answer

A cash discount of 3/15, net 30 means that if the invoice is paid within 15 days, the buyer will receive a 3 percent discount off the face value of the invoice. If the invoice is not paid within 15 days, the buyer must pay the full amount within 30 days. The terms "net 30" refer to the amount of time the buyer has to pay the full amount of the invoice.

A Cash Discount of 3/15, Net 30 Means That