Cash Discount: It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount. Trade Discount: It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler. To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 6DQ

To determine

Cash Discount:

It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount.

Trade Discount:

It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler.

To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 2

Question

Chapter 4, Problem 6DQ

To determine

Cash Discount:

It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount.

Trade Discount:

It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler.

To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 4, Problem 6DQ

To determine

Cash Discount:

It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount.

Trade Discount:

It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler.

To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 4, Problem 6DQ

To determine

Cash Discount:

It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount.

Trade Discount:

It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler.

To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 4, Problem 6DQ

To determine

Cash Discount:

It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount.

Trade Discount:

It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler.

To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Answer 6

Chapter 4, Problem 6DQ

To determine

Cash Discount:

It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount.

Trade Discount:

It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler.

To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Answer 7

Chapter 4, Problem 6DQ

To determine

Cash Discount:

It means a discount which is given by entity to its customers to motivate them to make cash payment within a specified time. The seller of the product often refers to it as a sales discount and buyer often refers to it as a purchase discount.

Trade Discount:

It means a discount which is given by the entity to its customers by reducing the retail price of the product when it sells to a reseller, rather than to end user. This discount is basically given by a wholesaler.

To explain: Difference between cash discount and trade discount and also the trade discount received on purchased product to be recorded or not.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 4 - Prob. 1MCQ Ch. 4 - A company purchased $4,500 of merchandise on May 1...Ch. 4 - Prob. 3MCQ Ch. 4 - Prob. 4MCQ Ch. 4 - Prob. 5MCQ Ch. 4 - Prob. 1DQ Ch. 4 - Prob. 2DQ Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - Prob. 5DQ

Solution Summary: The author explains the difference between cash discount and trade discount. Cash discounts are recorded in accounting records as a reduction in merchandise inventory.

Concept explainers

Videos

Want to see the full answer?

Chapter 4 Solutions