You are studying with some classmates and are reviewing each others responses to the following questions: Why
Question:
You are studying with some classmates and are reviewing each other’s responses to the following questions:
“Why do companies off er sales discounts to customers? How would a sales discount 1/10; n/45 be interpreted?”
Your classmate responds as follows:
“Companies off er sales discounts so that they can earn revenue quicker or sell inventory quicker. A sales discount of 1/10; n/45 means that the buyer has to pay one tenth of the invoice amount within 45 days.”
Required
Identify how your classmate’s answer could be substantively improved.
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Related Book For
Understanding Financial Accounting
ISBN: 9781119406921
2nd Canadian Edition
Authors: Christopher D. Burnley
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