Net Monthly

Mezza
Mezza Registered Posts: 8 New contributor 🐸
in General Qualifications 2022 discussion
Hi, I've just been doing mock questions for my level 2 ITBK exam and one question asked what the final payment date would be for an invoice dated 25 Aug with payment terms of Net Monthly. I put 30 Sept and this was apparently wrong so I googled it and it says I'm right ?

Comments

  • anony123
    anony123 Registered Posts: 500 Epic contributor 🐘
    Not sure tbh, got the question?
  • Mezza
    Mezza Registered Posts: 8 New contributor 🐸
    The question was....A supplier called Archer Joinery has sent an invoice for 1340.00, the date of the invoice is 25 Aug, their payment terms are Net Monthly. Give the date by which the supplier should receive payment.
  • anony123
    anony123 Registered Posts: 500 Epic contributor 🐘
    Won’t it be the 25th of September?
  • anony123
    anony123 Registered Posts: 500 Epic contributor 🐘
    Yh it will be.
  • anony123
    anony123 Registered Posts: 500 Epic contributor 🐘
    So the invoice was received on the 25th August. Most businesses have a month to pay for the invoice. So you just add 30 days to the original date. Not sure how you got 30th of Sep from.
  • Mezza
    Mezza Registered Posts: 8 New contributor 🐸
    The answer was 31st August, which would only give the customer 6 days to pay. So my thoughts were it is too close to the end of Aug so net monthly would take it to the end of the following month (Sept). Net 30 days is a different payment term.
  • anony123
    anony123 Registered Posts: 500 Epic contributor 🐘
    Oh ok. Is this bookkeeping transactions?
    Did it so long ago lol
  • Mezza
    Mezza Registered Posts: 8 New contributor 🐸
    It was the Introduction to Bookkeeping module
  • anony123
    anony123 Registered Posts: 500 Epic contributor 🐘
    It must be bookkeeping transactions! Everybody needs to start with that.
    Hope you understand the double entry
  • RAKTHER
    RAKTHER Registered Posts: 28 Regular contributor ⭐
    Hi Mezza,
    It should be 30th of August because net monthly means the end date of month of invoice. The customer would get 6 days for payment it doesn't matter.

    RAKTHER
    Training Coordinator, Osborne Training
  • RAKTHER
    RAKTHER Registered Posts: 28 Regular contributor ⭐
    edited November 2023
    Hi Mezza,
    It should be 30th of September because net monthly means Payment due on last day of the month following the one in which the invoice is dated. If it said 30 days of invoice then it should be 25th of September.

    RAKTHER
    Training Coordinator, Osborne Training

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