Question

Difference between trade discount cash discount and rebate

Answer 1

Dear Student,

Comparison Chart

BASIS FOR COMPARISON	TRADE DISCOUNT	CASH DISCOUNT
Meaning	A discount given by the seller to the buyer as a deduction in the list price of the commodity is trade discount.	A deduction in the amount of invoice allowed by the seller to the buyer in return for immediate payment is cash discount.
Purpose	To facilitate a bulk sales.	To facilitate a prompt payment.
Invoice	It is shown in invoice as a deduction itself.	It is not shown in invoice.
When allowed?	At the time of purchase.	At the time of payment.
Allowed to all customers	Yes	No
Entry in books	No	Yes
Vary with	Time period, when payment is made.	Quantity of goods purchased or amount of purchases made.

Regards