When a customer purchases merchandise inventory from a business organization, she may be given a discount which is designed to induce prompt payment. Such a discount is called a (n) trade discount. nominal discount. enhancement discount. cash discount.

Question

Business

Deegan Wang

4 April, 10:12

When a customer purchases merchandise inventory from a business organization, she may be given a discount which is designed to induce prompt payment. Such a discount is called a (n) trade discount. nominal discount. enhancement discount. cash discount.

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Answers (1)

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Steven Durham · Answer 1

Cash Discount.

Explanation:

Also referred to as Early Payment Discount, it is a reduction in the cost of goods or services by sellers to induce the customers to settle their bills on time. The offer is usually specified on the payment invoice. For instance, an invoice might offer a 2% reduction on the bill if payment is made within 8 days of issuance.