Which of the Following Is True About Noncumulative Quantity Discounts

question 14

Multiple Choice

Which of the following is true about noncumulative quantity discounts?

• A)They encourage large single orders.
• B)They encourage small,regularly spaced orders.
• C)They encourage a strong relationship between buyer and seller.
• D)They typically involve giving the buyer a credit to use against future orders.
• E)They are based on a total quantity purchased within a set time period.

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Definitions:

Bond Debenture

A type of unsecured debt instrument issued by a company to raise long-term funds, without collateral backing.

Corporation Issues Bonds

A financing activity where a corporation raises funds by issuing debt securities, known as bonds, to investors.

Market Rate

The prevailing interest rate available in the marketplace for instruments of similar risk and maturity.

Contract Rate

The interest rate to be paid on the face amount of a bond as specified in the bond indenture.