Trade discount: A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity. Cash discount: A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount. To explain: The difference between a trade discount and a cash discount.

Question

Want to see the full answer?

Answer 1

Question

Chapter 7, Problem 7.6Q

To determine

Trade discount:

A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity.

Cash discount:

A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.

To explain: The difference between a trade discount and a cash discount.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Compute the net income

I am searching for the correct answer to this financial accounting problem with proper accounting rules.

Answer 2

Question

Chapter 7, Problem 7.6Q

To determine

Trade discount:

A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity.

Cash discount:

A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.

To explain: The difference between a trade discount and a cash discount.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 7, Problem 7.6Q

To determine

Trade discount:

A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity.

Cash discount:

A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.

To explain: The difference between a trade discount and a cash discount.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 7, Problem 7.6Q

To determine

Trade discount:

A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity.

Cash discount:

A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.

To explain: The difference between a trade discount and a cash discount.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 7, Problem 7.6Q

To determine

Trade discount:

A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity.

Cash discount:

A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.

To explain: The difference between a trade discount and a cash discount.

Answer 6

Chapter 7, Problem 7.6Q

To determine

Trade discount:

A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity.

Cash discount:

A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.

To explain: The difference between a trade discount and a cash discount.

Answer 7

Chapter 7, Problem 7.6Q

To determine

Trade discount:

A trade discount is the reduction in price allowed by the manufacturer to the wholesalers when the products are purchased in large quantity.

Cash discount:

A cash discount is the reduction in the amount that is to be paid by the credit customers. It is usually allowed by the seller to buyer or customer, in order to motivate the customer to pay within a specified period of time. A cash discount is often referred as sales discount.

To explain: The difference between a trade discount and a cash discount.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 7 - Prob. 7.1Q Ch. 7 - Prob. 7.2Q Ch. 7 - Prob. 7.3Q Ch. 7 - Prob. 7.4Q Ch. 7 - Prob. 7.5Q Ch. 7 - Prob. 7.6Q Ch. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...Ch. 7 - Briefly explain the difference between the income...

Solution Summary: The author explains the difference between a trade discount and cash discount. Trade discount refers to the percentage reduction in price list allowed by companies to an important customer.

Want to see the full answer?

Chapter 7 Solutions