MANAGEMENT

Detailed explanation-1: -Cash Discounts. A discount given by a seller to the buyer as a deduction in the list price of the commodity is a trade discount. A reduction in the amount of invoice allowed by the seller to the buyer in return for immediate payment is a cash discount. To facilitate sales in bulk quantity.

Detailed explanation-2: -An early payment discount is one form of trade finance in which a buyer pays less than the full invoice amount due by paying the supplier earlier than the invoice maturity date. An early payment discount is also commonly referred to as a cash discount or prompt payment discount.

Detailed explanation-3: -Prompt payment discounts (also known as settlement or cash discounts) are offered to credit customers to encourage prompt payment of their account.

Detailed explanation-4: -A cash discount which is also called a purchase discount or sales discount is a decrease in the purchase price of goods due to early payment of cash. In other words, the seller of goods is aggreging to decrease the price of the goods if the buyer agrees to pay for the goods earlier than the due date.

Detailed explanation-5: -Cash discounts refer to an incentive that a seller offers to a buyer in return for paying a bill before the scheduled due date. In a cash discount, the seller will usually reduce the amount that the buyer owes by either a small percentage or a set dollar amount.