Cash discount is allowed on _______ repayment of debt.
Correct answer: B. Prompt
- A. Lump sum
- B. Prompt
- C. Actual
- D. None of them
Explanation
Cash discount is offered to encourage prompt repayment of a debt, usually within a specified credit period. Lump-sum or actual repayment does not by itself create the condition for a cash discount.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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