Question

Which discount is not recorded in the books of accounts?

Answer 1

Trade discount is not recorded in the books of accounts because the two parties involved in the negotiations decide the discount on conditions(sometimes even without it) like “if you pay in so and so time you’ll get 10% off” or “if you buy this much quantity of goods, you’ll get this much of discount”, etc. This discount is different from cash discount because cash discount is recorded in the books of accounts and this discount is like a on the spot sort of thing. We directly deduct the amount of discount from the total discount and record the transaction. We only mention this discount in the narration like”(Being so and so goods purchased and trade discount of X% provided)”.

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Answer 2

Answer:

Explanation:

Trade discount is not separately shown in the books of accounts, and all amounts recorded in a purchases or sales book are done in the net amount only. 4. Trade discount is allowed on both credit and cash transactions.