Accountıng I Deneme Sınavı Sorusu #1313923
Which of the following is true for "trade discounts"?
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Trade discounts usually decrase for a customer when a company either wants to encourage prompt payment |
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Trade discounts offer a cash discount to companies' customers if they agree to pay within a designated period. |
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Only the cost is recorded after a net of the trade discounts. |
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Trade discounts are not recorded and therefore they are not reflected in the books of accounting for both buyer and seller |
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Trade discounts increase the final sales price and are not affected by the date of payment |
Trade discount is the reduction in the catalogue price or listed price of the goods. Trade discounts reduce the final sales price and are not affected by the date of payment. Hence, it is important to note that trade discounts are not recorded and therefore they are not reflected in the books of accounting for both buyer and seller. Only the price is recorded after a net of the trade discounts. D is the right answer.
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