BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The basic formula for cash discount can be expressed as CD = P*R, which stands for cash discount = purchase price * discount rate.

Detailed explanation-2: -Trade discounts are usually based on the list price (catalogue price). Sales are recorded based on net price. Net price = List price – Trade discount.

Detailed explanation-3: -Cash discounts refer to an incentive that a seller offers to a buyer in return for paying a bill before the scheduled due date. In a cash discount, the seller will usually reduce the amount that the buyer owes by either a small percentage or a set dollar amount.

Detailed explanation-4: -5 Receipt-of-Goods dating Receipt-of-Goods = ROG Offers cash discounts determined from the date the goods were actually received, not the invoice date. i.e., 3/15 ROG means 3% discount if paid within 15 days from the receipt of goods.