BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The list price, or catalog price of an item, is the price for which you can generally sell an item. You can purchase the item at a trade discount, which is a discount off the list price. The trade-discount rate is the amount of the discount expressed as a percentage.

Detailed explanation-2: -Accounting of trade discount Trade discounts are usually based on the list price (catalogue price). Sales are recorded based on net price. Net price = List price – Trade discount. Therefore, trade discounts are not recorded in the books of accounts.

Detailed explanation-3: -The net price formula is the list price minus trade discounts.

Detailed explanation-4: -Trade Discount is a reduction of amount from the list price of the goods, which the trader allows to the customer at a given rate. A cash discount is given by the seller to the buyer when the buyer is making a purchase transaction.