Register now or log in to join your professional community.
why cash discount is always recorded in the bookes of account and trade discount is not recorded , as per the Law all expenses and losses are debited but y in the case of trade discount it is not applicable ??
Because trade discount is not an actual discount that granted by the seller or received by the purchaser. Rather it is a discount deducted from a list price (offered price) to arrive the actual selling price. In other words, it is a discount made to the purchaser before the actual transaction was made
So, since no transaction is made during the trade discount there is no need to record in the book of neither party (the seller or the purchaser).
In case of Cash Discount, as you have already booked the actual Sale Price so you must book the discount as well to show the loss/expense. Trade Discount isn't recorded because it happens even before booking the Sales amount.
Trade Discount isn't recorded because it happens even before booking
Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.