When Cal went to purchase a new filter for his aquarium, he noticed that the pet shop offered a 10% discount for patrons who paid in cash. Why would the pet store make this offer?
A) To increase its inventory turnover
B) To increase its fixed assets
C) To decrease its accrued liabilities
D) To ease the financial burden of accounts receivable
E) To decrease its liquidity

Question

Quizplus · Accepted Answer

Offering a discount for cash payments helps the store receive immediate payment, reducing the amount of money tied up in accounts receivable and easing cash flow management.

When Cal Went to Purchase a New Filter for His