Question: 1. Why do companies offer a cash discount?
2. How does a company that uses a perpetual inventory system determine the amount of inventory shrinkage?
3. Distinguish between cash discounts and trade discounts.
4. Is the amount of a trade discount on purchased merchandise recorded in the accounts?
5. What is the difference between a sales discount and a purchase discount?
6. Why would a company's manager be concerned about the quantity of its purchase returns if its suppliers allow unlimited returns?