A Discount Given to Encourage Prompt Payment Is Called

question 126

Multiple Choice

A discount given to encourage prompt payment is called:

• A)a cash discount.
• B)a sales discount by the seller.
• C)a purchase discount by the buyer.
• D)all of these are correct.

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Definitions:

Direct Labor-Hours

The measure of the amount of time workers spend directly producing goods or services, important in calculating labor expenses and production efficiency.

Fixed Manufacturing Overhead

Represents the set of costs that are required to operate a manufacturing facility, which do not vary with the volume of production.

Job-Order Costing System

A cost accounting system that assigns costs to specific production batches or jobs.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, based on a predetermined activity level.