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Journal — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountJournal3 Marks
Question
What is Cash Discount?
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Answer

Cash Discount is a discount allowed by the seller of goods to encourage prompt or early payment. The usual method to encourage payment within the specific time, the seller allows cash discount say @ 2% of invoice value to the buyer. Cash discount is calculated after deducting trade discount from the invoice price. In other words, cash discount is calculated always on net amount.

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