Question

write one difference between trade discount and cash discount.​

Answer 1

Answer:

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. A trade discount is shown as a deduction in the invoice.

Explanation:

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Answer 2

Answer:

purpose

¶ cash discount is allowed to the buyer to make payment at earliest

∆ trade discount is allowed to the buyer of goods to buy large quantities of goods

time of allowance

¶ cash discount is allowed by the seller or creditor to buyer or debtor at the time of payment

∆ trade discount is allowed by the seller to the buyer when goods are sold

Amount of discount

¶ cash discount is related to time .The earlier the payment the more is the cash discount

∆ trade discount is generally related to quantity of goods purchased or saled .The more the quantity the more is the amount of discount

Recording in books of account

¶ cash discount is recorded in the books of account cash discount received are recorded on the debit side and cash discount received are recorded on the credit side of

∆ trade discount is not recorded in books of account .Journal entries are not passed for this

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