As an Incentive for Customers to Pay Their Accounts Promptly

question 108

Multiple Choice

As an incentive for customers to pay their accounts promptly a business may offer its customers

• A) a sales discount.
• B) free delivery.
• C) a sales allowance.
• D) a sales return.

---

Definitions:

Installment Sales

A sales method that allows customers to pay for goods or services over a period of time in installments.

Critical Event

A significant occurrence that has a profound impact on an entity's operations or financial performance, necessitating special consideration in accounting and financial reporting.

Measurability Conditions

Criteria that determine when revenue can be recognized in the accounting process, ensuring it can be reliably measured.

Percentage-Of-Completion Method

An accounting method used to recognize revenue and expenses of long-term projects proportionally with the degree of completion.