When customers purchase goods on account, Spitz Manufacturing offers them a 2% reduction in the amount owed if they pay within 10 days. This is an example of a: a. Sales discount. b. Sales allowance. c. Bad debt. d. Sales return.

Question

Business

Travis Rice

19 December, 19:45

When customers purchase goods on account, Spitz Manufacturing offers them a 2% reduction in the amount owed if they pay within 10 days. This is an example of a: a. Sales discount. b. Sales allowance. c. Bad debt. d. Sales return.

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Answers (2)

Know the Answer?

Jaelynn Vincent · Answer 1

The correct answer is letter "A": Sales discount.

Explanation:

Sales discounts are offered to customers as a result of purchasing certain types of goods in bundles, over certain periods, or when there is a promissory note on credit and the merchant provides a margin in return for early payment. Sales discounts promote customers to increase their purchase quantities, the repayment of their debt - if any, and create good relationships between providers and customers.

Zander Wilcox · Answer 2

a. Sales discount.

Explanation:

Sales discount is the reduction offered by the business to their customers in price of a product on early receipt of products sold on credit. This discount is offered for a specified period. After this period customer has to pay the full amount within the normal credit period. e. g the term 1/10 n/30 means there is 1% discount available on payment within 10 days with credit term of 30 days.