When a customer of Vegas Sign Company chooses to pay immediately on delivery rather than wait to be billed in 30 days,the buyer receives a 5 percent discount.What is this 5 percent discount an example of?

Question

Quizplus · Accepted Answer

The 5 percent discount given for paying immediately on delivery is an example of a cash discount, which is a reduction in the purchase price offered to a buyer as an incentive to pay for an invoice early. This type of discount is often used to encourage prompt payment and improve cash flow for the seller.

When a Customer of Vegas Sign Company Chooses to Pay