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On August 1, our company purchases $1,000 worth of merchandise inventory on credit with the terms...

On August 1, our company purchases $1,000 worth of merchandise inventory on credit with the terms 3/10, n/30. What is the amount we would credit to cash if we pay this invoice on August 9?

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Answer #1

The Terms 3/10 , n/30 Means

The 3 refers to the Percentage and the 10 Refers to the Days within which the payment is to be made to Avail the Discount lf 3% , and the n/30 refers to that the payment is to be made within the 30 days if not paid in 10 days and no discount is given...

The company purchased $1,000 worth of Merchandise on August 1 and paying the invoice on August 9

i,e payment has been made within 10 days and the Discount of 3% is given

Therefore the Discount is $30 and the credit to cash is $970 .

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