BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -In simple words, a Trade discount is a discount that is referred to as a discount given by the seller to the buyer at the time of purchase of goods. It is given as a deduction in the list price or retail price of the quantity sold.

Detailed explanation-2: -Trade discount is a general discount allowed to every customer to promote the sales. Trade discount is allowed on the list price hence customer to pay only balance amount after deducting the trade discount. Hence trade discount will not be recorded in books of account. Was this answer helpful?

Detailed explanation-3: -Trade discount is allowed on the list price and sales is done on the basis of net price i.e. list price minus trade discount. Hence trade discount is not recorded in books of account.

Detailed explanation-4: -Trade discount is referred to as the discount that is offered by a seller to the buyer of the product in the form of reduction in the price of the item.

Detailed explanation-5: -Trade discount is allowed on both cash and credit transactions. In contrast, a cash discount is allowed to the customers only on cash payments.