Trade Discount Definition:
Trade discount is an
allowance or rebate from the scheduled price granted by the seller to buyer.
In other words, Trade discount is an allowance made from the full invoice
price to a customer who buys goods in the ordinary course of trade. For
example, a whole seller nay invoice goods to a retailer at the retail
selling price less a discount of 25%; which represents the retailer's gross
profit. The deduction
of trade discount is made on the invoice and only the net amount is
entered in the purchase journal and stock records. |
