Question

Define the following terms:

a) Cash Discount and Trade Discount

b) 2/10 net 30

c) Live stock Account
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Answer 1

a)Trade discount is given on the catalogue price of the goods while the cash discount is given on the invoice price. Trade discount is granted with the aim of increasing the sales in bulk quantity, whereas Cash discount is granted to facilitate a quick payment.

b)The notation "2% 10, net 30" indicates that a 2% discount can be taken by the buyer only if payment is received in full within 10 days of the date of the invoice, and that full payment is expected within 30 days, For example, if a $1000 invoice has the terms, "2% 10, net 30", the buyer can take a 2% discount ($1000 x .

c)Livestock account can be defined as when the farm owner ( in which domestic animals are kept ) uses animals for commercial purposes or sell them if the stock amount raised .

Explanation:

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