What is the difference between trade discounts and cash discounts… - Vidyadip

Question

What is the difference between trade discounts and cash discounts?

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Answer

Difference between Trade and Cash Discount
Basis of Difference	Trade Discount	Cash Discount
Meaning	It is allowed when goods are purchased or sold.	It is allowed at the time of payment.
Recording in books	It is recorded in invoice/bill but not in the books of accounts	It is recorded in the Journal Proper book and not in Cash Book.
Purpose	It is allowed to increase sale of business.	It is allowed for earlier payment from customer or party.
Deduction	It is deducted from the price-list of the goods.	It is not deducted from the price-list of the goods.

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