A Business Case
Presented to the
Faculty of the
Accountancy Department
In partial fulfilment
Of the course requirements
In ACTBAS2
Rafael Q. Ocampo
V24
March 1, 2012
Introduction The circumstance given depicts how important cash discounts are when looked into in real life. The latter compels debtors to pay on time their liabilities and when they do so, gaining deductions on their payables to one or several persons (their creditors). Accordingly, it also showcases some alternation of standards as businesspersons become more aware on how to manage or manipulate the said deductions. Like in the given situation wherein the cash discounts were still recorded though paid after the discount period where the business blamed the mail room or the post office for the delay (using the long process the reason of default of payment). Most likely, in that given case, only a few portion of the cash discount will be exhausted against complaint which, I think, is an advantage to the creditor (from 4% cash discount to 3% because of delay) since that does not completely exhaust the entirety of cash discount. Moreover, debtors often recognize and accept that cause making the full payment still fall on the discount period though was really paid beyond it. So the firm, instead of paying their debts on proper time (w/ discount), extends their actual payment on it using the money to some more transactions that involves credit terms or agreement. Ulysses, being a new employee of the company, would merely adhere or hold on into that “special norm” discussed to him by Lavares; that norm that exempts some of our deemed knowledge pertaining a particular business concept. Most firms, especially the low earning one, will most likely be induced by such having their reason “Other businesses do it anyway” (Peer pressure) and the thinking that it is so possible and somehow licit. Given these beneficial advantages doing such, it is still best to comply with