Contents of Business documents
1. Letter of enquiry
6. Advice note
7. Delivery note
14. Statement of account.
1. This is a deduction off the invoice price of goods purchased on credit.
2. This is given to encourage prompt payment.
3. The rate of cash discount depends on the period of credit allowed.
4. The buyer loses the cash discount if he fails to pay within the given period.
5. It is treated as an expense in the ledger accounts.
1. This is a deduction off the list price of goods purchased.
2. This is given to encourage bulk purchases.
3. The rate of trade discount depends on the quantity purchased.
4. Buyer is entitled to the trade discount even if he fails to pay within the given period.
5. It does not appear in the ledger accounts.