Asked by haneefa etimady on Apr 28, 2024
Verified
An invoice for $2,500 dated September 15 with terms 2/10, 1½/20, n/30, EOM is received in the mail on September 18. What payment will settle the invoice on October 11?
A) $2,450.00
B) $2,500.00
C) $2,200.00
D) $2,462.50
E) $2,125.00
Settle
To resolve or conclude an agreement or debt, often implies paying off a balance owed.
Invoice
A document sent by a seller to a buyer, detailing a transaction and requesting payment.
Payment
The action or process of paying someone or something or the amount paid.
- Calculate the ultimate payment required after discount reductions and payments have been accounted for.
Verified Answer
LV
Lucas VenegasApr 30, 2024
Final Answer :
D
Explanation :
The terms 2/10, 1½/20, n/30, EOM indicate that a 2% discount is available if paid within 10 days, a 1.5% discount if paid within 20 days, and the net amount is due within 30 days, all calculated from the end of the month (EOM) of the invoice date. Since the invoice is dated September 15, the EOM is September 30. Therefore, October 11 is within the 1½/20 discount period. The payment, with a 1.5% discount on $2,500, is $2,500 - ($2,500 * 0.015) = $2,500 - $37.50 = $2,462.50.
Learning Objectives
- Calculate the ultimate payment required after discount reductions and payments have been accounted for.