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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

What is the difference between a cash discount and a trade discount?

To determine

Explain the difference between the cash discount and a trade discount.

Explanation

Cash discount is an amount that the customer can deduct if a bill is paid within a specified time given by the seller. The discount is based on the total amount of the invoice after any returns and allowances and freight charges.

Trade discounts: The manufacturers and wholesalers offer their customer’s substantial reductions from the catalog price of their products. The reductions from the list or catalog price are called trade discounts.

Difference between the cash discount and trade discount:

S...

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