I need to calculate the net amount of a disbursement voucher. Gross amount of invoice: $42,730; terms: 3/10, n/30; debit memorandum: $4,380.

I don't know what 3/10, n/30 mean. How do I solve the problem?

Thanks

3/10, n/30

These are the terms of the invoice and they mean that the company will get a 3% discount if the merchandise is paid for in ten days or less .Otherwise, the full or net amount is due within 30 days. Figure out when the purchase was made and if you do get the discount subtract the 3% from the gross amount and then subtract the $4380 debit memo to come up with the amount you are to make your voucher for. I am guessing that the terns would not be included if the business were not going to take advantage of the discount. A shortcut to figuring out your discount is to take your gross amount of $42,730 and multiply it by 97%. Once you get that subtract $4380 and you will have the amount of your disbursement.

Good luck,
Amy

By the way,
I love this stuff so feel free to email me with future accounting problems.
[email protected] ;)