Which of the following is the reason why a seller allows a customer cash discount?
Answer Details
A cash discount is an incentive offered by a seller to a customer for paying an invoice or bill within a stated period. The reason why a seller allows a customer cash discount is to encourage prompt payment of the invoice or bill. By offering a cash discount, the seller reduces the amount owed by the customer, which in turn reduces the risk of non-payment. This can improve the seller's cash flow and reduce the need for costly debt collection efforts. Therefore, the correct option is: settlement of account within a stated period.