Presentation on theme: "Cash Discounts ~ Other Dating Methods"— Presentation transcript:
1Cash Discounts ~ Other Dating Methods Section 7.4Cash Discounts ~ Other Dating Methods
2End of Month Dating i.e… 3/10 EOM and 3/10 prox End of Month = EOM = Proximo = Prox.i.e… 3/10 EOM and 3/10 proxBoth mean that 3% may be taken as cash discount if the payment is made by the 10th day of the following month. (10 days from the end of the month!)
3Exception to EOMIf the date is the 26th or later in the month, add another month on!For example: Dated March 28 with terms 3/10 EOM means the 3% discount is good until MAY 10th.
4An invoice from Pearson Eduation, Inc An invoice from Pearson Eduation, Inc. is dated Feb 15 with terms of 2/10 EOM. Find (A) the final date on which the discount may be taken and (B) the net payment date.An invoice for some gourmet cookbooks is for $1475 and Oct 17. Find the amount due if the invoice terms are 3/20 proximo and the invoice is paid on Nov 18.
5Receipt-of-Goods dating Receipt-of-Goods = ROGOffers cash discounts determined from the date the goods were actually received, not the invoice date.i.e., 3/15 ROGmeans 3% discount if paid within 15 days from the receipt of goods.
6An invoice from Silver Specialties is dated June 4, with terms 4/15 ROG. The merchandise was received on July 25. Find (A) the final day on which the cash discount may be taken and (B) the net payment date.Find the amount due on an invoice of $896, with terms of 4/20 ROG, if the invoice is dated Mach 10, the goods are received on April 28, and the invoice is paid on May 15
7Extra Dating…Gives the buyer additional time to take advantage of discount20/10 – 50 extra or 20/10-50ex or 20/10-50xMeans: 2% discount is good for = 60 days
8An invoice id dated July 7 with terms of 1/10-60ex An invoice id dated July 7 with terms of 1/10-60ex. Find (A) the final date on which the cash discount may be taken and (B) the net payment date.An invoice for $5412 is dated May 22 and offers terms of 2/41-40x. If the invoice is paid on July 15, what is the amount of payment due?
9Credit given for partial payment If a portion of the payment is paid within the discount period, the customer receives a discount on the partial payment. (Use B = P ÷ R)An invoice for $1082 is dated Sept 14 and offers terms of 2/20 prox. A partial payment of $590 is paid Oct 15. Find (A) the amount credited for the partial payment, (B) the balance due, and (C) the cash discount earned.