Is a "trade discount" given to promote a product to a first buyer viewed the same as a "sales discount" given on an invoice. Is it a contra-revenue account ?
Sales
Less: Sales Discount
Net Sales
Is a "trade discount" given to promote a product to a first buyer viewed the same as a "sales discount" given on an invoice. Is it a contra-revenue account ?
Sales
Less: Sales Discount
Net Sales
Tags: invoice, net sales, revenue account
This entry was posted on August 31, 2010, 10:17 am and is filed under Discount Blog. You can follow any responses to this entry through RSS 2.0. Both comments and pings are currently closed.
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#1 by Sandy on August 31, 2010 - 10:17 am
Very often a trade discount is not treated as a discount, unlike a sales discount for early payment. If the list price was $100 and the trade discount was 20%, you’d just record the sale at $80. Your invoice would show $80. It is already known at time of invoicing. In the case of a sales discount, you don’t know at time of invoicing whether the customer will pay within the discount period.
#2 by baby lesh on August 31, 2010 - 10:17 am
sales
less:cost of wonderfuls sold
net sales
but you deduct it at your expenses after adding your other income
and am not sure if it is contra