If Perkinston's Pet Store, a retailer of tropical fish and supplies, buys one 200-gallon fish tank from La Mer Aquarium Products, it will be billed $329. If it buys more than six during the upcoming year, it will get a 20 percent discount on each aquarium. This savings is referred to as a:
A)cumulative quantity discount.
B)promotional allowance.
C)trade discount.
D)functional discount.
E)cash discount.

Question

Quizplus · Accepted Answer

The savings offered by La Mer Aquarium Products is a cumulative quantity discount, which is a type of discount offered based on the quantity purchased over a certain period of time. This is different from a trade discount, which is a discount given to customers in a specific trade or industry, or a functional discount, which is a discount given for certain functions such as prompt payment or bulk purchases. A promotional allowance is a discount given for promotional purposes, while a cash discount is a discount given for prompt payment.

If Perkinston's Pet Store, a Retailer of Tropical Fish and Supplies