Trade discount is a rebate or allowance from the listed price granted by the seller to the buyer at the time of selling goods. Or Trade Discounts are those discounts offered to a certain class of buyers. It is a discount which is given on the listed price and no entry is made for this type of discount. Journal entry is made after deducting the amount of trade discount from the listed price of goods purchased or sold. If a book has a listed price of $350 and it is sold by the bookseller for $325. Then he has given a trade discount of $25. Trade discount is usually granted in the following circumstances:What Is a Trade Discount?
Definition
Treatment of Trade Discount
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True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
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