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What is Cash Discount  Form

What is Cash Discount Form

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Instructions and help about What Is Cash Discount

Welcome! In this video, we discuss and solve problem involving cash discounts. Cash discount are offered by businesses to encourage prompt or early payments of bills or invoices. The seller will provide a time period on the invoice within which discounts are allowed. If the buyer pays within that period, the buyer gets the discount. So, what’s the difference between Cash discount and Trade Discount? Trade Discount is given on the List Price while cash discount is given on the net price. Trade Discount is applied because the buyer makes a purchase irrespective of when they pay while cash discount is applied because the buyer pays early, within a specified period. Therefore, a cash discount is an incentive given to the buyer to pay early. There are various presentations of cash discount terms and dating methods but we will focus mainly on ordinary dating here. Here is a common example: 2/10, n/30 This is read “two-ten, net-thirty” The 2/10 means that the buyer gets a 2% discount if

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