SALES DISCOUNT POLICIES. Consider three businesses, all of which offer price reductions to their customers. The first is an independently owned Shell service station located at a busy intersection in Cincinnati, Ohio, that offers a 3% discount for cash purchases of gasoline. The second is a large Builders’ Square store located near a freeway interchange on the outskirts of Cleveland that offers building contractors terms of 3/10, n/30. And third, Huntington Clothiers is a Columbus-based clothing manufacturer and catalog retailer. Several times during each year, Huntington distributes a sales catalog in which men’s dress shirts are heavily discounted if purchased in lots of four or more. lol REQUIRED:
1. What are the main objectives of the discount policies in each of the three “ businesses?
2. How does accounting information assist each business in achieving its discount policy objectives?