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Cash discount and trade discount

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44 Points Posted on 06 June 2020
are cash discount and trade discount really different in practical world? or just the same..
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On 06 June 2020 at 02:42 Report
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My grammar is 💯 good I
7301 Points Posted on 06 June 2020

Cash discount is for cash transactions.

Trade discount s for credit transactions.

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On 06 June 2020 at 07:48
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42 Points Posted on 07 June 2020
Yes both are different in practical world as well.
Trade Discount - Entities usually provide for bulk purchases
Cash Discount - For early payment
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On 07 June 2020 at 11:59
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44 Points Posted on 07 June 2020
So on what amount we book the entry? after trade discount or after cash discount ?
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On 07 June 2020 at 12:02
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42 Points Posted on 07 June 2020
Trade discount you may receive at the time of purchase or after a duration as credit note, in both the situation you need to reduced the purchase price if you are receiving the trade discount and cash discount always credit to profit and loss account
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On 07 June 2020 at 12:07


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