A company that is allowed to deduct 3 percent from its total bill if it pays by a specific date is receiving a cash discount.

Question

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A cash discount is a deduction given by a seller on the invoice price to a buyer who pays within a specified period of time. In this case, the company is allowed to deduct 3 percent from its total bill if it pays by a specific date, which qualifies as a cash discount.

A Company That Is Allowed to Deduct 3 Percent from Its