Larry's Lawn Care Allows Customers to Use a Credit Card

question 81

Multiple Choice

Larry's Lawn Care allows customers to use a credit card for purchases. Larry pays 4 percent of the sale to the credit card company. To promote more business, Larry decides to offer a lower price to customers paying cash-that price being 3 percent less than the standard list price. Larry is giving his customers

• A)a functional discount.
• B)a trade-in allowance.
• C)a promotional allowance.
• D)a cash discount.
• E)an everyday low price.

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Definitions:

Accounting Standards

Rules and guidelines set by authoritative bodies that dictate how financial transactions and statements should be reported and maintained.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company, known as the parent company.

Parent

In business and accounting, a parent entity controls one or more subsidiary entities.