Wht is the differance between Trade discount and cash
Discount?
- 6 Answers
- 13715 Views
- I also Faced
- E-Mail Answers
Answer Posted / h.r. sreepada bhagi
Trade discount is generally given to the customers on bulk
purchase, repeated, purchases, etc. It's shown in the Sales
Invoice. Seller books the income net of discount and the
buyer books the purchase net of discount. In other words,
there is no need to account this discount separately.
However Cash discount is offered bu the seller to the buyers
on early payment & it's related to credit period. Eg, If
paid with in so many days, 2% discount on the invoice
amount, etc. Both the seller and the buyer need to account
the cash discount as expense or income in their respective
books of accounts.
In modern trading business (particularly retail trading),
discount is a regular feature & here the discount is given
at the time of sale itself, it can be treated as trade
discount and there's no need to book the discount
separately. Discount can be shown only in the MIS report for
the purpose of sales analysis and decision making.
| Is This Answer Correct ? | 11 Yes | 3 No |
Post New Answer View All Answers
how to prost entry for purchases with a bill
Please explain what do you do to increase revenues? What are your tactics, techniques, and sales methods?
What is meant by public accounting?
What is batch input? why we use batch input session in SAP(FICO)?
Hi sir, Our appointed one agent for sales promotion activities. This agent doing the job "canvas of our product". My quires 1)it is eligible for service tax and how to accounted. 2) this transaction is direct expenses or direct expenses? Pl suggest me
why creditors a/c dr. to discount received a/c ?
sir i want know how to fill vat return
WHAT IS ACCOUNTING HEAD FOR TRADE FINANCE? I HAVE PAID 49268 FOR TRADE FINANCE.WHERE SHOULD I TAKE IN TALLY
a.what products does your firm produce? b.what costs are asssigned to the product produced? c.for particular product,what direct materials are used? d.what percentage of total manufactoring costs is direct labor? direct materials?overhead? e.how is overhead assigned to the products? f.do you now use or plane to use an activity_based management system?why or why not?
What will be the journal entry of purchase and sale for ac purchased for 40000 vat 5% sold for 45000 vat5%
How new/innavtive assets are to be treated under IFRS?
Other accounting interview questions to expect when you interview for an accountancy job include:
List out the stages of double entry system?
What is accounting normalization?
What is an accounting transaction?
