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21 February, 07:50

A trade discount is:

(A) A term used by a purchaser to describe a cash discount given to customers for prompt payment.

(B) A reduction in selling price below the list price.

(C) A term used by a seller to describe a cash discount granted to customers for prompt payment.

(D) A reduction in price for prompt payment.

(E) Also called a rebate.

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Answers (1)
  1. 21 February, 09:49
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    (B) A reduction in selling price below the list price.

    Explanation:

    A trade discount is a reduction in selling price below the list price. A trade discount is usually given to wholesalers or retailers. It is usually given to people who buy on bulk.

    Cash discount is given when a buyer makes prompt payment.

    A rebate is a form of sales promotion where customers are given a cash refund for purchases made when certain conditions are met.
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