Provide an Appropriate Response

question 29

Essay

Provide an appropriate response.
-Give two reasons why cash discounts are offered by sellers.

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Definitions:

Operating Activities

Operating Activities refer to the primary revenue-generating activities of a company, such as sales and service provision, and their related expenditures.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or loss of value over time.

Indirect Method

A cash flow statement approach that adjusts net income for non-cash transactions and changes in working capital to calculate cash flow from operations.