Page 61 - Microsoft Word - 00 - Prelims.docx

Returns, discounts and sales tax

2.2 Accounting for discounts – trade discounts

Trade discount is deducted at the point of sale by the seller when preparing the sale
invoice and is NOT accounted for in the accounting records of either the seller or the
purchaser i.e. only the net (discounted) amount will be recorded.

Tutor notes guidance – discussion points

Take students through TYU 2 from chapter 5 of the Study Text to demonstrate
how trade discount is dealt with.

55