What is the label given to a discount offered for prompt payment?

The correct label for a discount offered for prompt payment is known as "Discounts allowed." This term is commonly used in accounting and finance to refer specifically to the reductions provided to customers who pay their invoices within a specified timeframe. Such discounts incentivize timely payments, helping businesses manage cash flow and reduce the risk of late payments.

While "Sales discount" generally refers to a broader category of discounts applied to sales, which can include various types of price reductions not exclusively tied to the timing of payment, it does not capture the specific context of discounts associated with early payment. "Early payment credit" and "Prompt payment rebate" are not standard terms widely recognized in accounting for this particular scenario, which further solidifies "Discounts allowed" as the appropriate label for the discount related to prompt payment.