In simple words,\u00a0<\/span>discount<\/span><\/strong>\u00a0<\/span>is a concession<\/span><\/strong>\u00a0or <\/span>allowance<\/span><\/strong>\u00a0<\/b><\/span>in price. <\/span><\/p>\n Discount is given to the buyers to encourage them to make payment in time. <\/span><\/p>\n The seller deducts the discount from the gross or total price; it is assumed that the buyer will pay the net amount. <\/span><\/p>\n There are different types of discounts. <\/span><\/p>\n Out of them, cash discount and trade discount are major in accounting. <\/span>\u00a0<\/span><\/p>\n Trade discount is allowed customers or debtors to encourage them to buy large quantity of goods. <\/span><\/p>\n The trade discount amount is adjusted in the invoice itself. <\/span><\/p>\n Therefore, it does not need to record in the book of accounts. <\/span><\/p>\n Trade discount\u00a0is applied on the\u00a0list price.\u00a0 <\/span><\/p>\n List price amount also known as price tag.\u00a0 <\/span><\/p>\n The value of trade discount depends on quantity of materials. <\/span><\/p>\n Net price = List price \u2013 Trade discount.<\/span><\/p>\n Keep in Mind (KIM) <\/span><\/b><\/p>\n\u00a0<\/h3>\n
TRADE DISCOUNT<\/b><\/span><\/h2>\n