A jewelry store promises to deliver custom-made wedding rings to a buyer within 2 weeks.However,it charges ten percent of the sales price in advance.In this example,which of the following techniques is the store using to increase cash inflows?

Question

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The store is taking deposits (an advance payment) from customers to increase their cash inflows. This is a common technique used by businesses that offer custom-made or personalized products/services that require a significant upfront investment. By taking deposits or progress payments, the business can ensure that they have enough cash on hand to cover the costs of materials and labor, while also reducing the risk of non-payment or cancellations.

A Jewelry Store Promises to Deliver Custom-Made Wedding Rings to a Buyer