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Subject Topic: Cost of Discount Question (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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azncpa
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Joined: 07 Nov 2009
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Posts: 108
Posted: 22 Jun 2010 at 21:47 | IP Logged  

Becker's formula  =

(360/pay period - discount period) x (discount %/100 - discount %)

I noticed Wiley had some questions where they paid after the discount period date. 

For example, 3/10 net 30 and the company pays on the 35th day.  wiley used 35-10 for pay period minus discount period. 

Becker did not have any questions where they paid after the discount period.  So do we use the date when it was paid in the formula or discount date which would be the 30 days if paid after the discount period?

 

 

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usmcretd
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Joined: 03 Jul 2010
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Posted: 11 Jul 2010 at 16:52 | IP Logged  

Yes, if the test question states that the company normally pays LATE, then use the date they usually pay.  That gives the true % of giving up the discount.
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