Types of Discounts

What is a discount?

• A reduction in the original price of a product or service

• An increase in the original price of a product or service

• A discount code for online shopping

• A discount on shipping costs

What is the purpose of a cash discount?

• Stimulates sales during specific seasons

• Encourages customers to buy in bulk

• Rewards customer loyalty

• Encourages prompt payment and helps businesses manage their cash flow

What is the purpose of a trade discount?

• Stimulates sales during specific seasons

• Rewards customer loyalty, incentivizes bulk purchases, and enables resellers to make a profit

• Encourages prompt payment and helps businesses manage their cash flow

• Encourages customers to buy in bulk

What is the purpose of a quantity discount?

• Stimulates sales during specific seasons

• Encourages prompt payment and helps businesses manage their cash flow

• Rewards customer loyalty, incentivizes bulk purchases, and enables resellers to make a profit

• Encourages customers to buy in bulk, helps businesses clear excess inventory, and promotes sales volume

What is the purpose of a seasonal discount?

• To stimulate sales during slow seasons, help businesses clear excess inventory, and attract customers with limited-time offers

• Rewards customer loyalty, incentivizes bulk purchases, and enables resellers to make a profit

• Encourages prompt payment and helps businesses manage their cash flow

• Encourages customers to buy in bulk, helps businesses clear excess inventory, and promotes sales volume

What is the List Price?

• The price listed on the invoice or bill sent by the seller to the buyer

• The price reduction available only during specific seasons or periods of the year

• The price that is officially stated or listed by the seller as the base price before any discounts or negotiations

• The final price that a buyer pays for goods after all discounts or deductions have been applied to the invoice price

What is the Net Price?

• The price that is officially stated or listed by the seller as the base price before any discounts or negotiations

• The price listed on the invoice or bill sent by the seller to the buyer

• The price reduction available only during specific seasons or periods of the year

• The final price that a buyer pays for goods after all discounts or deductions have been applied to the invoice price

The term 2%/15 net 30 represents a

• seasonal discount.

• quantity discount.

• cash discount.

• trade discount

A discount deducted from the invoice price of goods to enable the retailer to make profit is?

• cash discount.

• functional discount

• trade discount

• seasonal discount

The sale of consumer goods costing $100,000 attracts a cash discount of 7½% and a quantity discount of 5%. Calculate the value of the quantity discount and the value of the cash discount

• {'quantity discount': '$5,000', 'cash discount': '$7,500'}

• {'quantity discount': '$5,000', 'cash discount': '$7,125'}

• {'quantity discount': '$4,000', 'cash discount': '$7,125'}

• {'quantity discount': '$3,000', 'cash discount': '$6,000'}