Trade & Cash Discount

Which of the following is not true about trade discount?

• Applied over list price

• Record the discount in the ledger

• Just record the discounted price

• Given for bulk purchases

Which of the following is not true about cash discount?

• Applied over amount owing

• Recorded as discount allowed or discount received

• None of the above

• Given for early payment

Discount allowed is an ______.

• income

• expense

Discount allowed is _________.

• DR in nature

• CR in nature

Discount allowed is

• Discount given to the customer

• Discount given to the supplier

The list price of $1000, less trade discount of 5%.

A cash discount of 2% will be received if payment is made within five days.

Calculate the trade discount.

The list price of $1000, less trade discount of 5%.

A cash discount of 2% will be received if payment is made within five days.

Calculate the cash discount.