Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 25 - No. 31)
If a supplier gives a discount for early payment, what impact does this have on the business?
Increase cash outflow, decrease expenses.
Decrease cash outflow, decrease expenses.
Increase cash outflow, increase expenses.
Decrease cash outflow, increase expenses.
Explanation
The cash outflow decreases because of the discount, and the expense decreases since the business pays less to the supplier.
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