Sales Discounts: It refer to the cash discount that a seller offers to the buyer for the prompt payment on the balance due from the buyer according to the credit terms. The sales discount is based on the net sale that is the invoice amount less the sales returns and allowances. It is considered as a contra revenue account because it decreases the sales revenue. To Explain: The terms 1/10, n/30 and discuss the implications of switching over the payment terms.

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Chapter 5, Problem 13Q

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Sales Discounts: It refer to the cash discount that a seller offers to the buyer for the prompt payment on the balance due from the buyer according to the credit terms. The sales discount is based on the net sale that is the invoice amount less the sales returns and allowances. It is considered as a contra revenue account because it decreases the sales revenue.

To Explain: The terms 1/10, n/30 and discuss the implications of switching over the payment terms.

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