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What is a Trade Discount and most importantly Why It Is Not Recorded In Accouting Records ? ?
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Trade discounting problem
Replies (2)
Trade discount is basically qty discount....and as per money measurement principal only cash discount is to be recorded
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.
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