As an incentive for customers to pay their accounts promptly, a business may offer its customers a: Group of answer choices cash discount. trade discount. sales allowance. sales return.
Question
As an incentive for customers to pay their accounts promptly, a business may offer its customers a: Group of answer choices
cash discount.
trade discount.
sales allowance.
sales return.
Solution
As an incentive for customers to pay their accounts promptly, a business may offer its customers a:
Cash Discount.
Explanation: A cash discount is a deduction allowed by the seller of goods or by the provider of services in order to motivate the customer to pay within a specified time. The seller or provider often refers to this discount as a sales discount, and the buyer sees it as a cash discount. Its main purpose is to encourage customers to pay their bills quickly.
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The sales returns and allowances account is an example ofGroup of answer choices
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A buyer would record a payment within the discount period under a perpetual inventory system by creditingGroup of answer choicesAccounts Payable.Merchandise Inventory.Purchase Discounts.Sales Discounts.
When a seller records a return of goods purchased on credit, the account that is credited with the selling price of the goods returned is: Group of answer choices Sales Revenue. Sales Returns and Allowances. Inventory. Accounts Receivable.
A discount benefits a seller through earlier cash receipts and reduced collection efforts.
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