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In the books of seller, is deducted from the invoice price when the buyer pays earlier or on the date/term stipulated

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Answer:

In the books of seller, cash discount is deducted from the invoice price when the buyer pays earlier or on the date/term stipulated

Step-by-step explanation:

  • An early payment discount or cash discount is the reduction in invoice price due to payment before the due date.
  • A number of factors should be considered to see how much discount should be provided . Some of them are: check the cash discount offered by competitors, and check the payment history of the customer.
  • This strategy helps close the gap in cash flow and boost the working capital.
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