Page 66 - Demo

Review Numbers & Money Exchange│ Unit166Figure (3-1-1):Supply ChainTrade discount is the amount by which the manufacturer or dealers reduce the price of a product from the selling price as an amount or a percentage of the selling price, trade discount is a routine reduction from the regular fixed price of a product. The use of trade discounts allows the company to encourage customers to buy, stimulate sales, or dispose of inventory.The deduction in a business transaction is a waiver of acertain amount of money in the form of a percentage or other, and may have a financial impact on accounting records such as cash discount or quantity deduction or does not have a financial effect such as a trade discount.►Trade Discount = List Price× Discount Rate ►Discount Rate = TradeDiscountListPrice× 844►List Price= NetPriceComplementofTradeDiscountRateImportant Points 3-1-1:Discounts and Pricing Goods│ Unit 3