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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
| BASIS FOR COMPARISON | TRADE DISCOUNT | CASH DISCOUNT |
|---|---|---|
| Meaning | Trade Discount means the reduction in the list/dealer price of goods at the time of dealing with a buyer of goods | Cash Discount means the reduction in the amount of the Payment receivable from the debtor or payable to creditors |
| Benefit | Received order in Bulk | Received payment earlier |
| Time of Discount | At the time of dealing or sale | At the time of payment |
| Universal to all customer | Yes (if deal prompted on store etc.)Or No (if dealing by company separately with a single distributor) | No |
| Record in Books | Only recorded on Invoice, not in financial Books | Yes recorded in Financial books |
| Taxes | No need to pay taxes on trade discount | Yes because it will provide after-sale |
| Vary with | The number of goods purchased in the given time | Payment made in a given time |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
To Know the Difference Between Trade Discount and Cash Discount we have to know the meaning of the both with an example: 1. Trade Discount: Trade Discount…
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