Which term refers to a discount given as a percentage or dollar reduction at the point of sale?

Which term refers to a discount given as a percentage or dollar reduction at the point of sale?

• A. Perpetual inventory control
• B. Physical Inventory Control
• C. Cash Discounts
• D. Unit Control

Answer: (C)

Cash discounts are price reductions offered to encourage immediate payment, taken at the time of sale or when paying an invoice. They can be a percentage or a fixed dollar amount and are tied to payment timing, such as paying within a specified number of days. This helps both sides: the seller gets faster cash, and the buyer saves money by paying early. The other terms described relate to keeping track of inventory rather than offering price reductions—inventory-control terms focus on stock levels, while unit control deals with managing quantities of items, not discounts. For example, a seller might offer 2% off if the customer pays within 10 days; the buyer would pay 98% of the invoice if they meet the terms, otherwise the full amount is due.

Cash discounts are price reductions offered to encourage immediate payment, taken at the time of sale or when paying an invoice. They can be a percentage or a fixed dollar amount and are tied to payment timing, such as paying within a specified number of days. This helps both sides: the seller gets faster cash, and the buyer saves money by paying early. The other terms described relate to keeping track of inventory rather than offering price reductions—inventory-control terms focus on stock levels, while unit control deals with managing quantities of items, not discounts. For example, a seller might offer 2% off if the customer pays within 10 days; the buyer would pay 98% of the invoice if they meet the terms, otherwise the full amount is due.