In Order to Encourage Prompt Payment of a Trade Receivable

question 123

Short Answer

In order to encourage prompt payment of a trade receivable companies often offer ______________ to customers.

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Definitions:

Direct Materials

The raw materials directly used in the production of a product, easily traceable to the finished good.

Materials Cost

The total expense incurred from acquiring raw materials used in the production of goods.

Average Cost Method

An inventory costing method where the cost of goods sold and ending inventory are determined by calculating the average cost of all inventory items.

Equivalent Unit

A measure used in cost accounting to express the amount of work done on incomplete products in terms of complete units of output.