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Trade discounting problem

Cost Accountant (Student) (92 Points)

07 December 2013

Hello,

What is a Trade Discount and most importantly Why It Is Not Recorded In Accouting Records ? ?

Regards

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2 Replies

Juzer (ARTICLE ) (36 Points)
Replied 07 December 2013

Trade discount is basically qty discount....and as per money measurement principal only cash discount is to be recorded

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VIKASH KUMAR JAIN (Audit Executive) (711 Points)
Replied 08 December 2013

Trade discount is for bulk purchase, generally provided by wholesellers, while cash discount is for cash payment or immediate payment.Hence trade discount is not period based while cash discount is period based.So cash discount is like a financing expense or income like interest and hence form dr. or cr. to p/l a/c, while trade discount is not considered as income or expense.