A Cash Discount of 3/15, Net 30 Means That

Multiple Choice

A cash discount of 3/15, net 30 means that:

A) The buyer gets a 15 percent discount off the face value of the invoice if the invoice is paid within 3 days.
B) The buyer gets a 3 percent discount off the face value of the invoice if the invoice is paid within 15 days.
C) The buyer makes a 3 percent down payment on the face value of the invoice within 15 days; the remainder is due in 30 days.
D) The buyer gets a 3/15 (20 percent) discount if the invoice is paid within 30 days.
E) None of these alternatives is correct.