Difference between trade discount and cash discount.

Open in App

Solution

Dear student

Basis of Difference

Trade Discount

Cash Discount

Meaning

It is allowed when goods are purchased or sold.

It is allowed at the time of payment.

Recording in books

It is recorded in the invoice/bill but not in the books.

It is recorded in the discount column of the Cash Book’s debit side if allowed, and credit side, if received.

Purpose

It is allowed to increase sale.

It is allowed for earlier payment.

Deduction

It is deducted from the price-list of the goods.

It is not deducted from the price-list of the goods.

regards

Suggest Corrections

Similar questions

What is difference between trade discount and cash discount?

What is the difference between the trade discount and cash discount?

Distinguish between cash discount and trade discount.

What do you understand by trade discount and cash discount?

Sold goods for cash of Rs 4000 on 10% Trade discount & 10% cash discount. Posting in discount account will be?

Join BYJU'S Learning Program

Basis of Difference	Trade Discount	Cash Discount
Meaning	It is allowed when goods are purchased or sold.	It is allowed at the time of payment.
Recording in books	It is recorded in the invoice/bill but not in the books.	It is recorded in the discount column of the Cash Book’s debit side if allowed, and credit side, if received.
Purpose	It is allowed to increase sale.	It is allowed for earlier payment.
Deduction	It is deducted from the price-list of the goods.	It is not deducted from the price-list of the goods.