What does '3/15; net 30' mean in payment terms?

What does '3/15; net 30' mean in payment terms?

• A. No discount; Net 60.
• B. A 3% discount is given for payment within 15 days; full payment is due within 30 days.
• C. A 3% discount applies if payment within 30 days; due in 15 days.
• D. 3% Tax; 30 day payment.

Answer: (B)

Payment terms show when payment is due and whether a discount is available for paying early. In this case, a 3/15; net 30 term means you get a 3% discount if you pay within 15 days of the invoice date, and the full amount is due within 30 days if you don’t take the discount. For example, if the invoice is $1,000, paying within 15 days would cost $970 (3% off). If you don’t pay within 15 days but pay by day 30, you owe the full $1,000. The “net 30” part means the buyer has up to 30 days to pay the invoice in full, assuming the discount isn’t taken. There’s no tax implication implied by the terms themselves, and the term does not indicate a 60-day due date.

Payment terms show when payment is due and whether a discount is available for paying early. In this case, a 3/15; net 30 term means you get a 3% discount if you pay within 15 days of the invoice date, and the full amount is due within 30 days if you don’t take the discount.

For example, if the invoice is $1,000, paying within 15 days would cost $970 (3% off). If you don’t pay within 15 days but pay by day 30, you owe the full $1,000. The “net 30” part means the buyer has up to 30 days to pay the invoice in full, assuming the discount isn’t taken. There’s no tax implication implied by the terms themselves, and the term does not indicate a 60-day due date.