Explain about trade discount, Accounting Basics

Assignment Help:

Q. Explain about trade discount?

A trade discount is a percentage deduction or else discount from the specified list price or catalogue price of merchandise. Companies utilize trade discounts to

- Decrease the cost of catalogue publication. A seller is able to use a catalogue for a longer time by printing list prices in the catalogue and giving separate discount sheets to salespersons whenever prices change.

- Allowance quantity discounts.

- authorize quotation of different prices to various customers such as retailers and wholesalers. The seller's invoice may demonstrate trade discounts. But sellers don't record trade discounts in their accounting records because the discounts are used only to calculate the gross selling price. Nor do trade discounts emerge on the books of the purchaser. To illustrate suppose an invoice contains the following data

2359_Explain about trade discount.png

The seller files a sale of USD 3360. The purchaser files a purchase of USD 3360. Therefore neither the seller nor the purchaser enters list prices and trade discounts on their books.


Related Discussions:- Explain about trade discount

State the term- purchases returns and allowances, State the term- Purchases...

State the term- Purchases Returns and Allowances Purchases Returns and Allowances is the name of the account which provides better control of allowances and returns of mercha

Fiscal year, A time of 12 consecutive months used by an organization to acc...

A time of 12 consecutive months used by an organization to account for and report the results of its operations.

If on the opening day of business, If on the opening day of business, you p...

If on the opening day of business, you put in supplies worth $250 and $3000 cash, would that be considered a transaction OR would it be considered your beginning balances because

Explain user account control in windows vista, User account control is mean...

User account control is meant to allow users to run with standard user rights, as opposed to administrative rights. Administrative rights provide users the ability to read and chan

Example of accumulated depreciation account, Q. Example of accumulated depr...

Q. Example of accumulated depreciation account? The accumulated depreciation account doesn't represent cash that is being set aside to change the worn out asset. The un-depreci

Explain accounting cycle, Q. Explain accounting cycle? Creditors, Inves...

Q. Explain accounting cycle? Creditors, Investors as well as Managers use these statements in evaluating management's past decisions and as a basis for making future decisions.

Interpret the coefficients , A Use the CPS data to calculate mean log(wage)...

A Use the CPS data to calculate mean log(wage) for women and men. log(wage) is coded as the variable LNWAGE and the variable FE is coded 1 for female and 0 for male.) First use the

Types of financial analysis, TYPES OF FINANCIAL ANALYSIS a) According t...

TYPES OF FINANCIAL ANALYSIS a) According to the material used, the study can be - i) External analysis : Where analysis is done by exterior interested parties and  ii)

State the classified balance sheet, State the classified balance sheet ...

State the classified balance sheet ASSETS Current Assets are cash and any other assets which are expected to be realized in cash, sold, used up or expire within one year.

Analyzing how well the company is performing, Q. Analyzing how well the com...

Q. Analyzing how well the company is performing? The classified income statement illustrates important relationships that help in analyzing how well the company is performing.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd