Explain Discount
Briefly explain the term Discount and also describe their important types?
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Discount is a method of rising the sale in which businessman decreases the price of goods and services that is paid by customer for buying the product. That decrease in price is termed as discount. It is just similar to the reward to customer to buy more. With this, business can promote their sales. There are lots of kinds of discount but two kinds are very important.
First is Trade discount that is provided on the list price. This is not recorded in the books of company.
Second is cash discount that is provided for getting cash rapidly from customers. This is recorded in the books of company by making discount permitted account.
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