trade discount . this is also called settlement diccount . trade discount is allowded when early payment required our suppilers .
A trade discount occurs when an item is offered along with another item that is paid for. A cash discount is a reduction in the price of an item.
cash discount enable the buyer to pay promptly while trade discoint is a discount given to the buyer so that he can buy more goods
The main difference between, cash discount is shows in account book but tradediscount does not show in account book.
Cash discount is the discount in amount in accounts payable while trade discount is on sales price discount which is not recorded in business books and transaction is recorded at discount price.
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A trade discount is a discount that a manufacturer or wholesaler makes to the retail price of a product when selling to a reseller. A cash discount is a reduction made to the invoice if the buyer pays the invoice prior to a set date.
a cash is an amount deducted from the value of an item at time of purchase, while a trade discount is the deducted from purchase amount for an item of placed value surrendered at time of purchase.
Debit purchasesCredit cash / bankno entry for trade discount and in case of cash discount:Debit purchasesCredit cash / bankcredit discount
Trade discount is the discount which is in actual sale price of unit at the time of sales and never shown in books of accounts. Cash discount is the discount in value of accounts receivable after sales completed.
can you give some example if cash discounts?
quantity discount and trade discount are the same thing. it is used when the dealer wants to sell in bulk. while cash discount is given when he wants prompt payment.
Difference between trade discount and cash discount are as follow:1)on the basis of objective:td: this discount is allowed to increase sales.Cd: this discount is allowed to motivate the customer to pay early.2)basis:td: it is allowed on the list price of the goods.Cd: it is allowed on the amount to be paid.3)entry in the books:td:it may be stated as information,but it is not recorded in the books of account.Cd: it is recorded in the books of accounts.4)entry in invoice:td: it is stated in the invoice.Cd: it is not shown in the invoice.5)receiver:td: it is allowed to all customer, wethers cash or credit.Cd: it is not allowed to all customer.6) rate:td: rae of trade discount is generally higher than the cash discount.Cd: rate of cash discount is generally lower.