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.
|
Difference / Distinction between Cash Discount and Trade Discount
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