In Chapter 4 of Secondary POA syllabus, students will learn two different types of discounts provided in a transaction. They are namely trade and cash discount. Students have to know their differences and how to record them in double entry.
| Trade discount | Cash discount |
| A reduction of list price (original price) | A reduction of invoiced price |
| Encourage bulk purchase and customer loyalty | Encourage prompt payment |
| Not recorded in accounts | Recorded as discount allowed or discount received |
Students will also need to learn how to record double entry for cash discounts.
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