If Discounts Are Given for Early Payment, _______

question 40

Multiple Choice

If discounts are given for early payment, _______.

• A)sales discounts are recorded when recording the cash receipt and reducing a customer's receivable
• B)the customer's account payable balance should be decreased accordingly
• C)the company should credit the Sales Discount account
• D)an increase in equity will result from a customer taking the discount

---

Definitions:

Uncertainty

The state of being unsure or having doubts about a situation or outcome, often leading to anxiety or indecision.

Hedonic Theory

A psychological theory suggesting that individuals are motivated by the pursuit of pleasure and the avoidance of pain.

Preference Test

A preference test is a method used to assess individuals' choices or affinities among different options, typically to understand their likes, dislikes, or behavioral tendencies.

Sign

An object, quality, or event whose presence or occurrence indicates the possible presence of something else, often used in communication.