Page 34 - LESSON 2: DISCOUNTS AND COMMISSIONS

3/16, n/30 - A 3% cash discount is offered if the bill is paid within 15 days of the
date of the invoice. If the discount term is not taken advantage of, the
full amount must be paid within 30 days of the date of the invoice.
n/e.o.m. - Net due at the end of the month. The bill must be paid by the last day
of the month of the invoice.

n/l5 e.o.m. - Net due 15 days after the end of the month regardless of the date of
the invoice.

2/15 e.o.m. - Regardless of the date of the invoice, 2% may be deducted if it is
paid within 15 days after the end of the month.
n/15 r.og. - Net due 15 days after receipt of goods.

To determine the due date, exact calendar days are counted. Here are some tips to
determine the exact calendar days.

1. When a sale is made after the 15th day of a month, for n/e.o.m. terms, postpone payment
until the end of the following month. For example, an invoice dated August 17 is due by

September 30.
2. When a sale is made after the 26th of a month with terms n/15 e.o.m., payment is due by

the 15th of the second month following. Thus, an invoice dated August 28, is due by October
15.

Let us look at the following examples.

Example 1.

A sale of Sala sets costing ₱3,700 is made on April 5, 2020, with terms 3/15, n/30. Find
the net amount to be paid on (a) April 12, 2020, (b) April 30.

Solution:

a.) Since April 12, 2020, is within 15 days of the date of the invoice, a 3% cash discount is
given.

Formula:
ℎ = 0.03 × ₱3,700

= ₱111

= ₱3,700 − ₱111
= ₱3,5899

Page | 12 BUSINESS MATHEMATICS: MODULE 2