Asked by Sulema Benavides on Jun 07, 2024
Verified
A trade discount is:
A) A term used by a purchaser to describe a cash discount given to customers for prompt payment.
B) A reduction in selling price below the list price.
C) A term used by a seller to describe a cash discount granted to customers for prompt payment.
D) A reduction in price for prompt payment.
E) Also called a rebate.
Trade Discount
A reduction from the list price granted by a seller to a buyer, often based on volume or trade practices.
List Price
The initial sales price of a product or service before any discounts or allowances are applied.
Cash Discount
A reduction in the invoice amount offered by a seller to a buyer as an incentive for early payment, typically within specific terms.
- Differentiate between the role of merchandise inventory as a current asset and how it is depicted in financial statements.
Verified Answer
Learning Objectives
- Differentiate between the role of merchandise inventory as a current asset and how it is depicted in financial statements.
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