BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The discount offered by the manufacturer to the customer (retailer/wholesaler)
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The amount that have to be calculated on the list price (LP)
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It is the difference between list price (LP) and net price (NP)
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Is the amount in Ringgit
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Reductions on the amount due to customers who pay their bills within a given period of time to encourage customer payment of bills
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Detailed explanation-1: -A trade discount is the amount by which a manufacturer reduces the retail price of a product when it sells to a reseller, rather than to the end customer.
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: -Trade Discount Amount = List Price x Trade Discount Percentage. Net Amount Payable = List Price x (1-Trade Discount Percentage) Amount. No calculation required as a seller provides the discount amount.
Detailed explanation-4: -One affiliate orders 500 blue, for which “k” allows a 30% trade discount. Subsequently, the complete retail cost of 1, 000 rupees is decreased to 700 rupees, which is the sum that “K” bills to the affiliate. The exchange rebate is, thusly, 300 rupees.