BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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185
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390
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650
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740
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None
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Detailed explanation-1: -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-2: -Another way of finding the net price is the complement method. The complement of your trade-discount rate is 100 percent minus the discount rate. This is sometimes called the net-price rate. You can multiply the list price by the complement to find the net price.
Detailed explanation-3: -exaMpLe 6.1h Determine the amount of discount for a $100.00 list price subject to the discount series 40%, 12.5%, 8⅓%, and 2%. Rate of discount = Amount of discount/List price = 52.8375/100 = 0.528375 The single equivalent rate of discount is 52.84%.
Detailed explanation-4: -Net price is what a customer pays. To calculate the net price, start with the list price and add any taxes and other government-mandated charges. Then subtract any discounts, rebates or negotiated prices.