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Trade discount refers to the reduction (discount) to the list price of the certain product; it is recorded in the book in net amount, meaning no recognition of the discount taken. Cash discount refers to the discount taken when the payables are paid with the discount term; it is usually denoted by2/10, n/30 (meaning2 oercent discount is given if paid with10 days and if not paid the amount is due in30 days); discount may or may not taken in the book (gross or net method).
TARED DISCOUNT MEANS THE DISCOUNT GIVEN BY THE SELLER TO THE BUYER ON GOODS. CASH DISCOUNT MEANS THE SELLER GIVE A DISCOUNT ON THE PAYMET TIME.IT IS AFFECTING THE ACCOUNTS
Trade discount: discount given by the seller to the buyer as a deduction in the list price of the goods to facilitate a bulk sales
Cash discount: A deduction in the amount of invoice allowed by the seller to the buyer in return for immediate payment to facilitate a prompt payment.
Trade discount is for PURCHASE and PRICE related offer( To Attract customer for Purhchase). But cash discount is for PAYMENT and CREDIT related like to receive payment for credit sales ealier ( To Attract customer to pay earlier).
