Sales Allowances and Sales Discounts are both designed to encourage customers to pay their accounts promptly.

Question

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Sales allowances are given to customers as a reduction in the price of the goods or services due to some defect or problem with the order whereas sales discounts are given to customers who pay their accounts within a certain period of time. Both offer an incentive to customers but for different reasons.

Sales Allowances and Sales Discounts Are Both Designed to Encourage