Cash discounts:

Question

Cash discounts:

Quizplus · Accepted Answer

Cash discounts provide benefits for both the seller and the buyer. They conveniently separate the pricing of credit and cash customers, allowing sellers to offer different prices to different buyers. They also encourage buyers to pay promptly, which speeds up the collection of receivables and reduces the seller's exposure to bad debts. However, cash discounts lower profit margins on sales, so sellers need to carefully consider the cost and benefits of offering this incentive. Finally, cash discounts are often included as part of the terms of sale and must be communicated clearly to buyers.

Cash Discounts