Question

Distinguish between trade discount and cash discount.

Answer 1

The differences between trade discount and cash discount are

$\begin{array}{cc}\text{Trade Discount}& \text{Cash Discount}\\ \text{When discount is allowed by}& \text{When discount is allowed}\\ \text{the seller to its customers at}& \text{to customers for making}\\ \text{a fixed percentage on the list}& \text{prompt payment,it is}\\ \text{price of the goods, as per the}& \text{called cash discount.}\\ \text{practice of trade, it is called}& \\ \text{trade discount.}& \\ \text{It is allowed to compete with}& \text{It is allowed to facilitate}\\ \text{competitors.}& \text{prompt payment.}\\ \text{It is allowed at the time of}& \text{It is allowed at the time of}\\ \text{purchase.}& \text{payment.}\end{array}$