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Partial Payments

Partial payments result from paying less than the full invoice amount before the end of the discount period. To calculate the credit for a partial payment, the payment amount is divided by the complement of the trade discount rate to get the amount credited. The credited amount is then subtracted from the invoice amount to get the balance due. For an invoice of $1,000 with terms of 2/10, n/30, a partial payment of $400 made on August 10 would credit $408.16, leaving a balance due of $591.84.

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581 views

Partial Payments

Partial payments result from paying less than the full invoice amount before the end of the discount period. To calculate the credit for a partial payment, the payment amount is divided by the complement of the trade discount rate to get the amount credited. The credited amount is then subtracted from the invoice amount to get the balance due. For an invoice of $1,000 with terms of 2/10, n/30, a partial payment of $400 made on August 10 would credit $408.16, leaving a balance due of $591.84.

Uploaded by

Mary
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Partial Payments

Partial payments result from payments made to the supplier for less than the full invoice amount before the end of the discount period. The formula for a partial payment is:

Example: Calculate the amount to be credited for an invoice, which was date August 1 for $1,000 with terms of 2/10, n/30. A partial payment of $400 was made on August 10.
$400 1 - .02 $400 .98 = 408.16

List price Less: Amount credited Balance Due

$1,000.00 408.16 591.84

a. The partial payment will be divided by the complement of the trade discount rate to get the total dollar amount to be credited to the account. b. Subtract the amount to be credited from the invoice dollar amount to arrive at the balance due.

MJC Revised 1/2012

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