Final answer:
The statement is true; discounts incentivize earlier payments from buyers, improving the seller's cash flow and reducing their collection efforts.
Step-by-step explanation:
The statement that a discount benefits a seller through earlier cash receipts and reduced collection efforts is true. By offering discounts, a seller can encourage buyers to pay earlier than the actual due date, which results in faster cash inflows and can improve the seller's cash flow.
This financial strategy also reduces the amount of effort and resources dedicated to chasing payments and managing credit offered to customers. Therefore, the statement effectively captures the benefits a seller might enjoy from offering discounts to customers.
The statement is true. Discount benefits a seller through earlier cash receipts and reduced collection efforts. When a seller offers a discount on a product or service, it incentivizes customers to make a purchase sooner rather than later. This results in earlier cash receipts for the seller, which can be beneficial for their cash flow. Additionally, by providing a discount, the seller may also reduce the need for extensive collection efforts since customers are more likely to pay their bills promptly to take advantage of the discount.