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Trade discounts are given to try to increase the volume of sales being made by the supplier. The discount described as trade rate discount is sometimes called "trade discount". Trade discount is the discount allowed on retail price of a product or something. for e.g. Retail price of a cream is 25 and trade discount is 2% on 25.
Discounts that must be deducted from the costs of purchased inventory are the following: Trade discounts (reduction in the price of goods that a manufacturer or wholesaler provides to a retailer) – includes a discount that is always allowed, regardless of the time of payment.
General Journal - Sales discount example Date Description of entry Debit Credit 9-1 Accounts Receivable (Customer A) 500.00 Sales 500.00 Merchandise sale on account, terms 2/10, n/30. 9-7 Cash 490.00 Sales Discounts 10.00 Accounts Receivable (Customer A) 500.00 A/R paid by Customer A, taking a 2% discount.
Many dry-shipping stocks trade at market price levels far below the accounting values placed on their books or book value. These huge market value discounts could prove to spell big returns. Let's ...
The Commercial Finance Association is the leading trade association of the asset-based lending and factoring industries. [7] In the United States, factoring is not the same as invoice discounting (which is called an assignment of accounts receivable in American accounting – as propagated by FASB within GAAP).
The behavior of both costs and revenues is linear throughout the relevant range of activity. (This assumption precludes the concept of volume discounts on either purchased materials or sales.) Costs can be classified accurately as either fixed or variable. Changes in activity are the only factors that affect costs.
Generally Accepted Accounting Principles (GAAP) [a] is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC), [1] and is the default accounting standard used by companies based in the United States.
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