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Question

Trade discount allowed on sales is _________________.

A
Debited to customer's account
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B
Credited to customer's account
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C
Debited to profit and loss account
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D
None of these
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Solution

The correct option is C Debited to profit and loss account
Discount is classified as Cash Discount and Trade Discount.
Cash discount is allowed to speed up the cash collection from the customers.
Trade discount is allowed to promote the sales and its an indirect expenses which need to be debited to profit & loss account.

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