Company purchases inventory from QuickQuick Pool Supplies on June 1. The sales t

Question

Company purchases inventory from QuickQuick Pool Supplies on June

1. The sales terms on the invoice fromQuickQuick Pool Supplies are

3/15 ,net 30. What does this mean? What is TalbotTalbot's potential savings, if any? How much time does the company have to take advantage of these savings?

3/15, n/30 means that TalbotTalbot Company will get

( a)3% discount if they pay the invoice whithin 15 dayss (b) 3%discount if they pay invoice within 30 days (c) 15% discount if they pay the invoice within 3 days ?

of the invoice date; otherwise, the full amount is due

a) at talbot's convenience

b)within 15 days.

c)within 30 days.

The potential savings resulting from taking advantage of the discount will be

a)3%

b)15%

c)30%

of the original invoice price.

TalbotTalbot will need to pay the invoice within :a)3, b)15, c:30 days of the original invoice date in order to take advantage of these savings.

Explanation / Answer

3/15 net 30 means that 3% discount can be offered if the company pay the amount within 15 days otherwise the amount is to be paid within 30 days.

So,

A. Correct option is A. 3% discount if paid within 15 days.

B. Correct option is C. If not paid, total amount is due within 30 days.

C. Correct option is A. Since discount is 3%.

D. Correct option should be B. Since the amount is to be paid within 15 days to take discount.

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