A reduction n price to encourage prompt payment is........

A reduction in price to encourage prompt payment is a cash discount. A cash discount is a reduction in the price of a product or service that is offered to customers who pay their bills within a specified period of time, usually within 10 or 15 days after the invoice date. The purpose of a cash discount is to encourage customers to pay their bills promptly, which can help improve a business's cash flow and reduce its accounts receivable. For example, a business might offer a 2% cash discount if a customer pays their bill within 10 days after the invoice date. This means that if the customer pays their bill within the specified period, they will receive a 2% reduction in the total amount due. Cash discounts are a common practice in business and can benefit both the customer and the business by helping to improve cash flow and reduce outstanding accounts.