A reduction in the amount of cash received from a customer for early payment is known as a sales discount.

Question

Quizplus · Accepted Answer

A sales discount is a reduction in the amount of cash a customer has to pay if they pay their invoice early. This discount is typically expressed as a percentage of the total invoice amount. For example, a 2% sales discount may be offered if the invoice is paid within 10 days of the date of the invoice. The purpose of offering a sales discount is to encourage customers to pay their invoices early, which can help improve a company's cash flow.

A Reduction in the Amount of Cash Received from a Customer