If a firm decides to take the cash discount that is offered on goods purchased on credit, the firm should ________.

Question

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If a firm decides to take the cash discount, they should pay on or before the last day of the discount period. This allows the firm to take advantage of the discount while still paying within the credit period. Waiting until the last day of the credit period (choice B) does not necessarily ensure that the firm will be able to take advantage of the discount, as the discount period may end before the last day of the credit period. Not taking the discount (choice C) is not advantageous for the firm, as it means they will be paying more than necessary. Choosing to pay as soon as possible (choice A) may not allow the firm to take advantage of the discount period, and they may end up paying more than necessary.

If a Firm Decides to Take the Cash Discount That