-
Introduction to BookKeeping and Accounting11 Topics1 Quiz
-
Introduction to Books of Accounts6 Topics1 Quiz
-
Subsidiary Books of Account I4 Topics1 Quiz
-
Subsidiary Books of Account II4 Topics1 Quiz
-
Principles of Double Entry Bookkeeping2 Topics1 Quiz
-
Cash Book6 Topics1 Quiz
-
Petty Cash Book1 Topic1 Quiz
Topic Content:
- Meaning of Discount
- Reasons for Granting Discount
- Types of Discounts
- Trade discounts
- Features of Trade Discount
- Cash discounts
- Features of Cash Discounts
- Classification of Cash Discounts
- Trade discounts
- Format of Three Column Cash Book
What is a Discount?
A discount can be defined as the reduction in the catalogue price of an article or goods in order to encourage bulk purchases and prompt payment.
Reasons for Granting Discount:
1. To encourage large quantity purchases.
2. Help to avoid the risk of bad debts.
3. To encourage prompt payment.
4. Discount attracts Customers.
5. It provides for the buyer’s profit margin.
6. To avoid tying down business capital.
Types of Discounts:
Discount is divided into two (2), namely:
(i) Trade discounts
(ii) Cash discounts
1. Trade Discount:
This is an allowance made by the manufacturer or wholesaler to the retailer in the form of a reduction from the catalogue prices of goods supplied. It is an inducementa thing that persuades or leads someone to do something. More to the customer to buy goods in large quantities. It is
Full lesson notes for the term are available to subscribers only.
You are viewing an excerpt of this Topic. Subscribe Now to get Full Access to ALL this Subject’s Topics and Quizzes for this Term!
Click on the button “Subscribe Now” below for Full Access!
Subscribe Now
Note: If you have Already Subscribed and you are seeing this message, it means you are logged out. Please Log In using the Login Button Below to Carry on Studying!
- ⚡ Instant grading & results
- 📈 Student progress tracking
- 📝 End-of-term examinations
- 📄 Official student report cards
- 🚫 Ad-free learning experience
- 📱 Mobile & desktop friendly
