Image credit

Image credit

ZIMSEC O Level Commerce Notes: Retail Trade: Trade and Cash discounts

Trade discount

  • a gross deduction from the gross invoice or catalog price
  • given by one trader to another
  • varies with the quantity and type of goods purchased and is deducted at the point of sale
  • usually the rate is high
  • not recorded in the books of accounts
  • encourages customers to buy from a particular source

Cash discount

  • an allowance from the net invoice price given to any customer who pays promptly
  • deducted when the payment is made
  • rate is usually lower than that of Trade discount
  • encourages early payment of debts
  • may increase the rate of stock turn
  • helps reduce the trader’s bad debts
  • saves clerical work due to early payment
  • recorded in the books of accounts

To access more topics go to the Commerce Notes page.

Quick NetOne, Telecel, Africom, And Econet Airtime Recharge

If anything goes wrong, chat with us using the chat feature at the bottom right of this screen