What Is Discount ? Meaning And Types Of Discounts Cash Trade

Discount is given so that the buyer is induced What is Discount ? Meaning and Types of Discounts Cash Trade What is Discount ? Meaning


In simple terms, Discount is an allowance or concession in price. Discount is given so that the buyer is induced (lured) to place an order and later to make payment in time.

Discount can be also referred to as a deduction in price. The seller deducts the discount from the gross or total price, and the buyer is supposed to pay the net amount.


Discount is given so that the buyer is induced What is Discount ? Meaning and Types of Discounts Cash Trade Types of Discounts


Discount is given so that the buyer is induced What is Discount ? Meaning and Types of Discounts Cash Trade


The two kinds or types of discounts are :-

  1. Cash Discount
  2. Trade Discount


1. Cash Discount


Cash discount is an allowance or concession given by the seller to the buyer. This discount is offered to encourage the buyer for quick payment or settlement. It is allowed for immediate payment of cash or payment within a short period.

The cash discount is normally shown in the quotation and invoice. It is deductible from the total price and the buyer is requested to pay only to the net amount. Cash Discount is usually stated in the percentage form.


2. Trade Discount


Trade Discount is a reduction in the catalogue price of the goods allowed only if the quantity ordered by the buyer is quite large. Its purpose is to encourage the buyer to make bulk purchases. It is allowed on cash as well as credit sales.

The trade discount is not shown in the books of account. The trade discount is calculated as some percentage of the catalogue price. It varies according to the quantity of order.

Komentar

Posting Komentar

Postingan populer dari blog ini

Balayam Nail Rubbing Exercise Cures Alopecia, Hair Loss, Bald

Gambar
Disclaimer! Following article is not an outcome of a medical research nor mentions any scientific evidence to support its claim. Subject below is controversial in nature and is completely based on author's personal experience. Before imitating on any of the following, please do consult a registered medical professional. Author of this article is neither a doctor, nor he is involved in any health related research studies. Whether to or not to trust material below is left to you. This is for your kind information to avoid consequences, if any, arising by using information published on this website. 1. What is Balayam ? Balayam, a Yoga technique, was invented in India by ancient Rishi Munnis (Wise Sages) who were maestro Yogis (Yoga Masters) and Vaidyas (Doctors) of their time. These scholarly Indian ancestors who even excelled in science of Ayurveda and Human Physiology found Balayam as a simple solution to the most complex dilema of baldness. According to them, Balayam or Na...
Baca selengkapnya

Graicunas Theory Of Span Of Control - Example And Formula

Gambar
Graicunas Theory of Span of Control Vytautas Andrius Graiciunas (1898-1952) was a Lithuanian french management consultant, management theorist and engineer. Image Credits © Verslo Naujienos . In 1933 , he published a paper called " Relationship in Organisation ." In this paper, he mentioned three types of Superior-Subordinate relationships, viz., Direct Single Relationships, Direct Group Relationships, and Cross Relationships. According to V.A. Graicunas, as the number of subordinates increases arithmetically (like 1, 2, 3, 4, 5, 6, etc.) the number of relationships which the superior has to control also increases almost geometrically (like 1, 6, 18, 44, 100, 244, etc.). Therefore, a superior can only control a limited number of subordinates, and anything beyond this limit is very hard to control. Example of Graicunas Theory V.A. Graicunas Theory can be explained with the help of this simple example. For example, consider Gaurav (G) is a superior (boss) and Manoj (M...
Baca selengkapnya

Types Of Inflation In Economics With Examples, Diagrams, Graph

Gambar
Types of Inflation This article briefly explains different types of inflation in economics with examples, wherever necessary. It is also supplemented with a hierarchical diagram to help readers summarize and quickly assimilate their list. Here are different types of inflation depicted and listed below. Image credits © Gaurav Akrani. The list is as follows: Coverage or scope: Comprehensive or Economy-Wide Inflation, and Sporadic Inflation. Time of occurrence: War-Time Inflation, Post-War Inflation, and Peace-Time Inflation. Government's reaction or control: Open Inflation, and Suppressed or Repressed Inflation. Rising prices: Creeping, Mild or Low Inflation, Chronic or Secular Inflation, Walking or Trotting Inflation, Moderate Inflation, Running Inflation, Galloping or Jumping Inflation, and Hyperinflation. Different causes: Deficit Inflation, Credit Inflation, Scarcity Inflation, Profit Inflation, Pricing Power, Administered Price or Oligopolistic Inflation, Tax Inflatio...
Baca selengkapnya