The primary purpose of a cash discount is to:
A)compensate customers for an out-of-stock item.
B)compensate customers for faulty goods or services.
C)offset the interest charges on an account receivable.
D)induce customers to pay promptly.
E)induce customers to purchase specialty items.

Question

Quizplus · Accepted Answer

A cash discount is a reduction in the price of goods or services if the customer pays within a specified period of time. This is done to encourage customers to pay promptly, which can help businesses improve their cash flow.

The Primary Purpose of a Cash Discount Is To