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In: Accounting

What are the different type of sales discount?!

What are the different type of sales discount?!

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Expert Solution

In common Parlance there are three major types of discount i.e Trade discount,Cash discount & Quantity discount.
Trade discount Trade discount means a sum or percentage deducted from the list price of a commodity allowed by a manufacturer, distributor,retailer etc.
It is usually allowed one firm to another involved in same nature of trade.
Cash discount It is generally allowed by seller of goods or service provider to encourage payments within a specified time limit it is also used to boost up sales which helps to create a competitive advantage in industry.
Quantity discount This quantity discount is given to the buyers who generally buys goods in large quantities. This discount is given to retain customers who will purchase in some bulk quantities & this discount will help to preserve customer base in long run.
In addition to above the following are few types of discount that we encounter in our day to day business transactions:
Contractual Discounts
Order specific discounts
Price break discounts
Seasonal discounts
Trade in credit
Volume discount
Free shipping
Early payment discount
Buy one get one free etc..

ekkarill92 answered 2 years ago
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