What is gross selling price, Accounting Basics

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Q. What is Gross selling price?

When a sale is on account it credits the Sales account as well as debits Accounts Receivable. The following entry records a USD 20000 sale on account. Typically a seller quotes the gross selling price as well called the invoice price of goods to the buyer.

But sometimes a seller quotes a list price of goods along with available trade discounts. In this latter situation the buyer should calculate the gross selling price. The list price less every trade discount is the gross selling price. Merchandising companies that trade goods use the gross selling price as the credit to sales.


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