Question

what is CASH DISCOUNT. and TRADE DISCOUNT

Answer 1

Cash discount is given for early payment of the amount due while trade discount is given on the bulk purchases. Another difference is that trade discount is not shown in the books of accounts while cash discount is shown as discount received received/given.For example, Ram paid on 28 Jan, instead of 14 Feb, he can get early payment discount or cash discount. Trade discount is like unit charge would $15 if quantity is more than 500 units instead of $16.

Answer 2

Answer:

Cash discount is the discount allowed to the debtor for making prompt payment or for making payment before the due date

Trade discount

Trade discount is the discount allowed to the purchaser when the goods are purchased in large quantities