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.

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Answer 1

Question

Chapter 5, Problem 3RQ

To determine

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.

To determine

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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Students have asked these similar questions

At December 1, 2025, a company's Accounts Receivable balance was $20160. During December, the company had credit sales of $54000 and collected accounts receivable of $43200. At December 31, 2025, the Accounts Receivable balance is A. $30960 debit. B. $30960 credit. C. $74160 debit. D. $20160 debit.

Whispering Winds Corp.'s trial balance at the end of its first month of operations reported the following accounts and amounts with normal balances: Cash $14720 Prepaid insurance 460 Accounts receivable 2300 Accounts payable 1840 Notes payable 2760 Common stock 4600 Dividends 460 Revenues 20240 Expenses 11500 Total credits on Whispering Winds Corp's trial balance are A. $28980. B. $30360. C. $29900. D. $29440

Swifty Corporation's trial balance reported the following normal balances at the end of its first year: Cash $14440 Prepaid insurance 530 Accounts receivable 2660 Accounts payable 2130 Notes payable 3190 Common stock 4100 Dividends 530 Revenues 22040 Expenses 13300 What amount did Swifty Corporation's trial balance show as total credits? A. $31460 B. $32520 C. $30930 D. $31990

Answer 2

Question

Chapter 5, Problem 3RQ

To determine

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.

To determine

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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Answer 3

Question

Chapter 5, Problem 3RQ

To determine

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.

To determine

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.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 3RQ

To determine

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.

To determine

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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Answer 5

Chapter 5, Problem 3RQ

To determine

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.

To determine

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.

Answer 6

Chapter 5, Problem 3RQ

To determine

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.

Answer 7

Chapter 5, Problem 3RQ

To determine

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.

Answer 8

To determine

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.

Answer 9

To determine

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.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 5 - When recording a credit sale, what account do we...Ch. 5 - Prob. 2RQ Ch. 5 - Prob. 3RQ Ch. 5 - Briefly explain the accounting treatment for sales...Ch. 5 - Prob. 5RQ Ch. 5 - Prob. 6RQ Ch. 5 - 7.What two purposes do firms achieve by estimating...Ch. 5 - Prob. 8RQ Ch. 5 - 9.What are the financial statement effects of...Ch. 5 - Prob. 10RQ

Solution Summary: The author explains the difference between trade discount and sales discount. Trade discount is to change the existing list price without publishing a new price list or disguise actual price among the competitors.

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