A Sales Discount Does Not

question 157

Multiple Choice

A sales discount does not

• A)provide the purchaser with a cash saving.
• B)reduce the amount of cash received from a credit sale.
• C)increase a contra revenue account.
• D)increase an operating expense account.

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Definitions:

Short-term Financial Management

The practice of managing a company's financial activities that are expected to be resolved within a year.

Carrying Costs

The expenses incurred by holding inventory, including storage, insurance, and taxes, over a certain period.

Cash Cycle

A business concept that describes the process of converting resources into cash flows, from purchasing inventory to collecting revenue from customers.