A company which foregoes the discount when credit terms are 4/15 net 70 is essentially borrowing money from his supplier for an additional
A) 40 days.
B) 55 days.
C) 70 days.
D) 85 days.

Question

Quizplus · Accepted Answer

The company has 70 days to pay the invoice, but the discount period is 15 days. By not taking the discount, the company is effectively borrowing the money for the remaining 55 days (70 - 15 = 55).

A Company Which Foregoes the Discount When Credit Terms Are