Question: Consider three businesses all of which offer price reductions to

Consider three businesses, all of which offer price reductions to their customers. The first is an independently owned gas station located at a busy intersection in Cincinnati, Ohio, that offers a 3 percent discount for cash purchases of gasoline. The second is a large home improvement store located near an interstate exit in suburban Cleveland that offers building contractors terms of 3/10, n/45. And third is a clothing manufacturer and catalog retailer located in Columbus. Several times during each year, a catalog is distributed in which men’s dress shirts are heavily discounted if purchased in lots of four or more.
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?

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  • CreatedSeptember 22, 2015
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