Invoice Payment Terms and Discounts

The video tutorial by Le Anar covers cash discounts and the ordinary dating method. It explains how to calculate net cost after discounts, determine if cash discounts are earned, and use postdating in calculations. The ordinary dating method is defined, and examples are provided to demonstrate its application. Exercises are included to practice finding discount and payment dates, as well as calculating discount amounts and total amounts due.

What is the primary purpose of offering cash discounts?

• To increase the list price

• To extend the payment period

• To encourage prompt payment

• To reduce shipping costs

In the term '2/10 net 30', what does the '10' represent?

• The amount of discount in dollars

• The total number of days to pay the invoice

• The number of days to take the discount

• The percentage of discount

If an invoice is dated October 21st with terms '3/15 net 30', what is the last date to take the discount if postdated to November 1st?

• November 15th

• November 16th

• November 30th

• December 1st

How many days are there in the month of February during a leap year?

• 30 days

• 29 days

• 31 days

• 28 days

For an invoice dated September 4th with terms '4/15 3/20 1/30 net 60', what is the net payment date?

• October 4th

• October 24th

• November 4th

• November 3rd

If an invoice of $1,080 is paid within the 20-day discount period with a 2% discount, what is the discount amount?

• $25.00

• $18.00

• $20.00

• $21.60

What is the total amount due if the invoice is $1,080, the discount is $21.60, and shipping is $62.50?

• $1,121.10

• $1,120.90

• $1,122.00

• $1,120.15