Concept:A cash discount is a deduction given to a debtor for making payment promptly.
Explanation:When a seller wants to encourage a customer to pay early, the seller offers a reduction in the amount owed.
This reduction is called a cash discount.
It is usually stated as a percentage of the invoice value, for example
2% off if the customer pays within
10 days.
The main aim is to improve the seller's cash flow and lower the risk of bad debts.
A bulk discount applies to large quantities purchased, not to prompt payment.
A commission is a payment made to an agent or salesperson for services performed.
A general allowance is a broad term and does not specifically describe a reward for early payment.
Therefore, the allowance made to a customer for prompt payment is a cash discount.
Answer:C. cash discount.