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What os difference between trade and cash discount |
| Answer» \tKey Differences betweenTrade DiscountCash DiscountTrade discount is merely a device to determine the price.Sales are invoiced at the net price after deducting the trade discountCash discount is the deduction from the net Invoice price.Trade discount is allowed by the wholesalers to the retailers to enable the retailer to sell the goods to the consumers at the list price and still leave a margin of profit.But Cash Discount is allowed by a creditor to his debtor to induce him to make prompt payment.Trade discount usually varies with the quantity of goods purchased.While cash discount varies with the time within which the debt is paid.Trade discount is not recorded in the books of account.cash discount must be recorded in the books of accounts.\t\xa0 | |