DATING

Dating is an agreement whereby a specified

time period for payment of an invoice is
arranged.
The type of dating arrangement varies
within a particular industry to another.

2/10 net 30 (n/30) would mean that a

2%discount off the billed cost is permitted
if the invoice is paid with in 10 days.
Following the date of invoice,the payment
of the net amt(total amt of billed cost) is
required between the 11th and the 30th day
following the date of the invoice.
 Problem
An invoice dated march 1, for 10 chairs at a cost of $24 each,carries
terms of 2/10 net 30. If the bill is paid on any day from march 1 to
march 11, 2% may be deducted
.
$24 each
x 10 quantity
----------------------------
$240 total cost

$240 billed cost

x 2% cash discount
-------------------------------
$4.80 Cash Discount

billed cost =$240

-- cash discount =$4.80
----------------------------------
NET COST =$235.20
However, if the bill is paid on or after March 12, the full amount of $240 is due.
 Problem

Date of last date first date last date penalty

Invoice for for net for net period
discount payment payment starts
---------------------------------------------------------------
-
March 1 March 11 March12 March 31 April 1

{-Discount Period-} {----------Net Period----------}

 C.O.D. Dating

Cash-on-delivery dating is a type of dating that

means payment must be “on the spot” as delivery
takes place.
Goods valued at $500 cost are purchased by a retail
store and dating terms. What is the amt remitted?
When?
invoiced amount =$500
Amount remitted =$500
when = As delivery takes place .
 Regular Dating

Is one of the most common kinds of dating.

The discount is calculated from the date of
the invoice which usually is the same date
merchandise is shipped.
What payment should be made on an invoice
for $500 dated Nov 14 carrying terms of 4/10
net 30?
 Regular Dating

 If paid on or before Nov 26:

$500 billed cost
-20 cash discount(500x 4%)
-------
$480 remitted
If paid between Nov 27 and Dec 16 (20 day net
payment period), no discount is permitted and the
full $500 is remitted.
 Extra Dating(X)

 Calculated from date of invoice,with a

specified no of extra days granted during
which time the discount may be taken. Thus
2/10-60X means that the bill is payable in
10 days plus 60 extra days(a total of 70
days} from the date of the invoice in order to
earn the 2% discount. The full amount is due
after the expiration of 70 days. Often
unstated 20 day additional net payment
 Extra Dating

1. An invoice dated March 16 has a billed

cost of $1800 and terms 3/10-60X.
Determine:

c. Final date for taking cash discount.

d. Cash discount earned if bill is paid June 14.
c. Amount due if bill is paid in full on April 17.
d. Net payment date.
 Extra Dating
a. Final date for cash discount :
March 16 through 31 = 15 days
April entire month = 30 days
May 1 through 25 = 25 days
END OF DISCOUNT PERIOD = May25=70days
f. None
g. Eligible for cash discount:
$1800 BILLED COST
-- 54 (CASH DISCOUNT $1800 X 3 %)
------------
$1746 amount due
l. Last date for net payment = 20 days after May 25
= June 14
 E.O.M. Dating

End of month means that the cash discount period is

computed from the end of the month in which the
invoice is dated rather than from the date of the
invoice itself.8/10E.O.M.(invoice dated April 1)
means that the time for payment is calculated from
the end of April, and an 8% cash discount may be
taken if the bill is paid by May 10,ten days after the
end of April. Once again a twenty day net period
occurs from May11 through May 31during which
time the retailer may pay the bill in full.
 E.O.M. Dating

Under this dating only invoices dated after

the 25th of any month are considered to be
part of the next month’s transaction. A bill
with 8/10 E.O.M. dated on the Aug 26,is
handled as a Sep 1 bill and the discount
period extends to October 10.
 E.O.M. Dating

An invoice for $1000 dated March 17 has

terms of 8/10 E.O.M.
a. What is the last date for the legally
deducting 8% cash discount?
b. what amt will be due if the bill is paid on
that date?
 E.O.M. Dating

a. Discount date = April 10(ten days after end

of march)
b. $1000 billed cost
- 80 cash discount ($1000 x 8%)
----------------------------------
$920 amount due
 R.O.G. DATING

 Receipt of goods dating, the discount period

is calculated from the date of the goods
arrive at the retailers premises,rather than the
invoice date.this type of dating is often
requested by the buyers located at a distance.
 R.O.G. DATING

An invoice for $100 is dated April 4 and

carries terms of 5/10 R.O.G. the goods arrive
in the store on May 7.
a. what is the last date that the discount may
be deducted?
b.how much should be remitted if payment is
made on that date?
 R.O.G. DATING

a. Add ten days to the date goods were

received; May 7 plus 10 days = May17
Last day for discount = May17

b. Amount to be remitted before May17=$95

 Advanced Dating (AS OF)

Time for payment is calculated from specified future

date that is neither the date of the invoice nor the
date the goods are received.
This is generally done so that additional time is
allowed for the payment to be made and for the
cash discount to be deducted. If shipment were
made on Feb 10 and the invoice date were May 1
terms 2/10 would mean that the payment was due
on May 11 or sooner with a 2% cash discount.
 Problem

A buyer receives an invoice for $500;

assuming the buyer paid on time , calculate
b. The last day on which the cash discount
may be taken
c. The amount to be remitted if the discount is
taken
 Date Terms Cash Amt
Invoice Merchandise Discount date Due
Date Is received
a. Feb 6 Feb 11 3/10, n/30
b. Aug 18 Aug 29 3/10 ROG
c. July 10 July15 8/10 EOM
d. Oct 15 Oct 20 6/10-30X
e. March 28 April 3 8/10 EOM
f. July 5 July 11 6/10-60X
g. Dec 3 Dec 7 1/10, n30
h. Sep 19 Sep 30 3/10 ROG
i. May 29 June 5 8/10 EOM
j. July 5 July 23 6/10 as of Oct 1
k. May 14 May 21 3/10 EOM
l. Dec 1 Dec 5 1/10, n/30
m. July 25 Aug 2 6/10 as of Nov 1
n. June 28 July 8 3/10-40X
o. Jan 18 Jan 24 6/10 ROG