A construction company was offered a 3 percent reduction in price off all invoices from a lumberyard for paying within 10 days of issue. The lumberyard was offering a
A) trade discount.
B) cash discount.
C) promotional allowance.
D) rebate.
E) flexible price.

Question

Quizplus · Accepted Answer

A cash discount is a reduction in the invoice price offered to buyers as an incentive for early payment. In this case, the 3 percent reduction for paying within 10 days is a cash discount.

A Construction Company Was Offered a 3 Percent Reduction in Price