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What earns a customer a sales discount?
ABuying goods in very small lots
BReturning damaged merchandise late
COrdering goods late in the season
DPaying their bills ahead of time
Answer & Solution
Correct answer: D. Paying their bills ahead of time
1. Sales discounts are price reductions given to customers that pay their bills early.
2. A bakery selling in bulk to restaurants might give such a discount to those that pay at delivery.
3. Returned merchandise is handled by returns and allowances, which is the other deduction from gross sales.
4. Both deductions are subtracted from gross sales to reach net sales.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.5 The Income Statement_
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