Question

Your company purchases $50,000 of inventory from a wholesaler who allows you 45 days to pay. In addition, the wholesaler offers a 3% discount if payment is made within 12 days. These payment terms would be expressed as: A. 0.03/12, n/45. B. n/45, 0.03/12. C. 3/12, n/45. D. n/45, 3/12.

Answer 1

Answer:

C. 3/12, n/45

Explanation:

These payment terms would be expressed as : 3/12, n/45.

This is because :

1. 3/12 means 3 % discount is granted if payment is made within 12 days.
2. n/45 means supplier allows customer to pay within 45 days in total.