Trade discount:
Seller of a product or service offers a reduction in the listed price of the product or service, such reduction is known as trade discount.
Sales discount:
Seller of a product or service offers a reduction in the (accounts receivable) amount to be paid by the customer, only if the customer makes payment within a specified period of time, such reduction is known as sales discount.
To explain: The difference between the trade discount and sales discount.
Sales discount:
Seller of a product or service offers a reduction in the (accounts receivable) amount to be paid by the customer, only if the customer makes payment within a specified period of time, such reduction is known as sales discount.
To describe: The location in which sales discounts are reported in the income statement.
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Financial Accounting
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