Calculating Cash Discounts and Net Amount Due

Cash discounts are offered in the terms of sale. A transaction with no cash discount would have terms of sale of net 30, for example. This means the net amount of the invoice is due in 30 days.

If a cash discount is offered, the terms of sale would be written as 2/10, n/30. This means a 2% cash discount may be taken if the invoice is paid within 10 days; if not, the net amount is due in 30 days.

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