ACCA FA · Chapter 4 · Question 5 of 10
How should a trade discount given to a customer be recorded in the ledger accounts?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) It is not recorded separately; revenue is recorded at the price after the trade discount
Explanation
Trade discounts are reductions in the list price given, for example, to regular or bulk customers. They are deducted on the face of the invoice and the sale is recorded at the net amount, so no separate discount account is used.
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