BUISENESS MANAGEMENT
MARKETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -A cash discount gives a seller access to her cash sooner than if she didn’t offer the discount. An example of a cash discount is a seller who offers a 2% discount on an invoice due in 30 days if the buyer pays within the first 10 days of receiving the invoice.
Detailed explanation-2: -Cash discount refers to the foregoing of a certain amount from the seller to the buyer for settling the transaction before the scheduled due date. It is also referred to as an early payment discount or prompt payment discount. The early payment ensures better cash flow for the seller.
Detailed explanation-3: -Discount Allowed: When at the time of sales or receiving cash, any concession is given to the customers, it is called discount allowed. Journal Entry: Example: Goods sold ₹50, 000 for cash, discount allowed 10%.
Detailed explanation-4: -Offering cash discount may lead to increase in sales.