Difference / Distinction between Cash Discount and Trade Discount

No	Cash Discount	Trade Discount
1	Cash Discount is the amount deducted from the amount due at the time of receipt.	Trade Discount is the amount deducted by the seller from the list price of goods at the time of sale.
2	Cash Discount is calculated after deducting trade discount, since it is loss to the seller and gain to the buyer.	Trade Discount helps a retailer to sell the goods at printed price and yet make the profit.
3	Cash Discount is always calculated on net price.	Trade Discount is calculated on gross price or list price.
4	It is given by a person receiving cash to a person giving cash.	It is given by the wholesaler to the retailer or by the manufacturer to the retailer.
5	Cash Discount is given to encourage early or prompt payment.	Trade Discount helps the businessman to sell the goods at list price and yet get the profit.
6	It is always recorded in the book of Accounts	It is not required to be recorded in the book of account.