Question

A company received an invoice for $1618 dated may 11, terms 2/15 EOM

Answer 1

Given :

A company received an invoice for $1618 dated may 11, terms 2/15 EOM

Solution :

Given 2/15, EOM means 2% discount on the total amount if paid within 15 days from the date of invoice.

EOM signifies End Of the Month.

EOM indicates full amount to be paid within 15 days after the end of the month in which invoice is issued.

(a) Last date of discount period : To qualify the discount person must be paying the invoice within 15 days of issuing the bill.

Here, the date of invoice is 11th May, Therefore, 11 + 15 = 26th May is the last date for availing discount.

and last date of credit period is EOM 15 days after the end of the month. Invoice issued in May so 15 days after EOM is 15th June.

(b) Company has to pay full amount of $1618. on June, 12 because last date for discount (26th May) is elapsed. So no discount is applied for this invoice.

(a) Last date of discount = 26th May

   Last date of credit period = 15th June

(b) Company has to pay full amount of $1618.