Invoice Terms and Partial Payment Calculation
What are the terms of the invoice?
The terms of the invoice are 3/10, n/60, which offer a 3% discount if paid within 10 days.
What was the original amount of the invoice?
The original amount of the invoice was $660.
What was the amount of the partial payment made?
The partial payment made was $460.
What is the amount of payment to be credited?
The amount of payment to be credited is $200.
What is the balance outstanding after the partial payment?
The balance outstanding after the partial payment of $460 is $200.
Answer:
The terms 3/10, n/60 provide the customer with the option to receive a 3% discount if the invoice is paid within 10 days. If not, the full amount is due within 60 days. In this case, a partial payment of $460 was made after the discount period, so no discount was applied. The balance outstanding after the partial payment on the original amount of $660 is $200.
The invoice terms 3/10, n/60 mean that the customer has the opportunity to take advantage of a 3% discount if they settle the invoice within 10 days. However, if the payment is made after the discount period, the full amount is due within 60 days.
When the partial payment of $460 was made on the original invoice amount of $660, the payment was not made within the discount period. As a result, no discount was applied to the payment. To calculate the amount of payment to be credited, we subtract the partial payment from the original amount: $660 - $460 = $200. Therefore, the remaining balance after the partial payment is $200.
The customer now has 60 days from the invoice date to settle the outstanding balance of $200 in full. This means the payment is due by 9/9 to avoid any additional charges or penalties.