Payments Flashcards
1
Q
When are discounts given?
A
To encourage loyalty
2
Q
Why is a prompt payment discount offered?
A
To encourage prompt payment
3
Q
When is a prompt payment offered?
A
To a customer for paying on or before time
4
Q
Example of prompt payment discount?
A
If a customer pays within 14 days, they will receive 5% cash discount
5
Q
Why is there no prompt payment discount at the point of issuing the sales?
A
As the seller doesn’t know if the customer will take the offer
6
Q
When is VAT calculated when discount is involved?
A
VAT is calculated after discount is taken
