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If the merchandise gross is 75,400 and term is 1/10, n/30, what is the payment?

If the merchandise gross is 75,400 and term is 1/10, n/30, what is the payment?

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Answer #1
  • 1/10 means: '1' indicates the discount percentage and '10' indicates the number of days from the date of the invoice within which the buyer has to pay the amount owed to the seller to avail (or to qualify for) the discount of 1%.

  • N/30 states that if the buyer is not able to pay the invoice amount within 10 days to avail 1% discount, then the entire invoice amount is due within 30 days from the date of the invoice.

Case 1 – Let’s assume the payment is done within 10 days, then

Payment = Gross amount – Discount

               = $75,400 – ($75,400 x 1%)

               = $74,646

Case 2 – Let’s assume the payment is not done within 10 days, then

Payment = Gross amount = $75,400

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