On August 18, Sullivan Company received an invoice in the amount of $6,700, having terms of sale of 4/15 EOM. What is the discount date?
Please
To determine the discount date, we need to first understand what "4/15 EOM" means.
"4/15" refers to a discount term, stating that the buyer is entitled to a cash discount of 4% if the invoice is paid within 15 days.
"EOM" stands for "End of Month" and means that the discount period starts on the first day of the following month from the invoice date.
In this case, the invoice date is August 18. To find the discount date, we will start counting the days from the first day of the following month, which is September 1.
Counting 15 days forward from September 1, we arrive at September 15. However, since the terms state "EOM," we need to push the discount date to the end of that month.
Therefore, the discount date in this case is September 30.