Terms of Sale

Terms of Sales Ordinary Dating: In this method of calculating the dates in order to determine if you meet the requirements for a discount and when final payment is due, the count will begin on the date of the invoice. 1. Start with the invoice:

From this source document, you will obtain the date of the invoice, which is in the upper right hand corner. You will also obtain the terms (2/10, n/30) of the repayment, which in this case is a 2% discount if the invoice is paid within the first 10 days after the date of the invoice or the total charges will become due in 30 days. 2. If this invoice is paid by February 4, 2012, then Love Thy Pets Inc., will receive the 2% cash discount. Calculate the end of the discount period by subtracting the invoice date from the total number of days in January, which are 31. The result is that there are 6 days left in January after the invoice date. To make ten days you will have to add 4 days from February, which will provide the final day of the discount period. MJC Revised 1/2012

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Terms of Sales 3. If the invoice is not paid by February 4th, then Love Thy Pets Inc., will be required to pay the total amount of the invoice within 30 days of the invoice date. Day 30 after the invoice date falls on February 24, 2012. There are six days left in January. If you subtract six days from the 30 days in the terms then you have 24 left in February before the due day. Final payment must be mail on or before February 24, 2012 in order to avoid late charges. Receipt of goods (ROG): In this method of calculating the dates in order to determine if you meet the requirements for a discount and when final payment is due, the count will begin on the date you receive the goods at your store instead of using the invoice date. 1. Start with the invoice:

From this source document, you will obtain from the red receiving stamp the date the goods arrived in your shipping and receiving department. You will also obtain the terms (2/10, n/30 ROG) of the repayment, which in this case is a 2% discount if the invoice is paid within the first 10 days after the date on the receiving stamp or the total charges will become due in 30 days after the date on the receiving stamp. MJC Revised 1/2012

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Terms of Sales 2. If this invoice is paid by February 15, 2012, then Love Thy Pets Inc., will receive the 2% cash discount. Calculate this by adding 10 days to the date on the red receiving stamp. 3. If the invoice is not paid by February 15th, then Love Thy Pets Inc., will be required to pay the total amount of the invoice within 30 days of the receiving date stamped on the invoice. There are 28 days in February except for leap years where there are 29 days. Assuming a non leap year you will subtract the receiving date stamped on the invoice from 28. Therefore, 28 minus 5 equals 23, then you will subtract 23 from 30 to arrive at 7 days into March. The final date of payment must be mailed out on or before March 7, 2012. End of Month (EOM): This dating method has two different processes. The first is if the invoice date is between the 1st and the 25th of the month. The second is if the invoice is dated between the 26th and the 31st of the month. The reasoning for the two processes is to give customers who purchase merchandise late in the month more time to pay their bill. Process 1 Invoices Dated between the 1st and the 25th of the month:

MJC Revised 1/2012

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Terms of Sales From this source document, you will obtain the date of the invoice, which is in the upper right hand corner. You will also obtain the terms (2/10, n/30 EOM) of the repayment, which in this case is a 2% discount if the invoice is paid within the discount period. Otherwise the full amount of the invoice must be paid on the final due date. 1. If this invoice is paid by February 10, 2012, then Love Thy Pets Inc., will receive the 2% cash discount. No Calculate is necessary just use the following chart for any invoice that is dated between the 1st and the 25th of the month. Invoice Due Dates if Invoice Dated between the 1st and the 25th Month End of Discount Period Final Payment Date January February 10 March 2 February March 10 March 30 March April 10 April 30 April May 10 May 30 May June 10 June 30 June July 10 July 30 July August 10 August 30 August September 10 September 30 September October 10 October 30 October November 10 November 30 November December 10 December 30 December January 10 January 30

2. If the invoice is not paid within the discount period then the full amount is due either on or before March 2 in order to avoid finance charges. No calculation is necessary just use the following chart for any invoice that is dated between the 1st and the 25th of the month. Invoice Due Dates if Invoice Dated between the 1st and the 25th Month End of Discount Period Final Payment Date January February 10 March 2 February March 10 March 30 March April 10 April 30 April May 10 May 30 May June 10 June 30 June July 10 July 30 July August 10 August 30 August September 10 September 30 September October 10 October 30 October November 10 November 30 November December 10 December 30 December January 10 January 30

MJC Revised 1/2012

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Terms of Sales Process 2 Invoice dated between the 26th and the 31st of the month:

1. If this invoice is paid by March 10, 2012, then Love Thy Pets Inc., will receive the 2% cash discount. No Calculate is necessary just use the following chart for any invoice that is dated between the 26th and the 31st of the month. Invoice Due Dates if Invoice Dated Between 26th and the 31st Month End of Discount Period Final Payment Date January March 10 March 30 February April 10 April 30 March May 10 May 30 April June 10 June 30 May July 10 July 30 June August 10 August 30 July September 10 September 30 August October 10 October 30 September November 10 November 30 October December 10 December 30 November January 10 January 30 December February 10 March 2

MJC Revised 1/2012

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Terms of Sales 2. If the invoice is not paid within the discount period then the full amount is due either on or before March 30 in order to avoid finance charges. No calculation is necessary just use the following chart for any invoice that is dated between the 26th and the 31st of the month. Invoice Due Dates if Invoice Dated Between 26th and the 31st Month End of Discount Period Final Payment Date January March 10 March 30 February April 10 April 30 March May 10 May 30 April June 10 June 30 May July 10 July 30 June August 10 August 30 July September 10 September 30 August October 10 October 30 September November 10 November 30 October December 10 December 30 November January 10 January 30 December February 10 March 2

MJC Revised 1/2012

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