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Why can't you add the trade discounts together when calculating the net price?
Wiki User
∙ 11y ago
Apart from the fact that often you cannot use multiple discounts at the same time, they are defined multiplicatively, not additively.
A 20% discount means that the price is reduced by 20% to 80% of its full price.
A 20% discount on top of a 20% discount is 80% of 80% which is 0.8*0.8 of the full price which is 64%.
Wiki User
∙ 11y ago
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What is the mathematical formula for calculating terms of trade?
Terms of trade = Price of Exports / Price of Imports The prices of exports and imports are usually calculated with respect to a specified base year. From that it is possible to calculate changes in the mix and the value of the trade flows to arrive at prices for the period in question.
Purchase discounts is the same as trade discounts true or false?
false
Trade discounts also called functional discounts are?
yes, trade discounts is also called functional discounts I wish I could improve this answer since it does not address the actual question of what these discounts are, but I am also looking for that answer, so hopefully someone will actually take the time to read the question before answering it.
How do you calculate trade discounts?
You have to ask the seller what trade discount they will give you. Its usually a sliding scale based on volume or established rating of the buyer with that seller.
How do you calculate selling price if you know cost price and profit percentage.?
If you know the trade price, and the the mark-up (profit) - simply multiply the trade price by the percent mark-up plus 1. Using your example - you have a phone which you bought at 1500 trade, and you want 50% profit, then the selling price is 1.5 x 1500 which is 2250.
Why trade discounts are not shown in books of accounts?
Product catalogs often provide a "list price" for an item. Oftentimes those list prices bear little relation to the actual selling price. A merchant may offer customers a trade discount that involves a reduction from the catalog or list price. Ultimately, the purchaser is responsible for the invoice price, that is, the list price less the applicable trade discount. Trade discounts are not entered in the accounting records. They are not considered to be a part of the sale because the exchange agreement was based on the reduced price levelRead more: Trade_Discount_will_be_recorded_in_the_books_of_accounts
What is trade discounts?
Trade discount is the discount that is deducted from the source and then the actual amount is shown. The trade discounts are not shown in the books of accounts. Only the cash discount is shown in the books of accounts but the trade discount will be deducted from the actual and the net amount will be considered.
Is a trade discount on a purchased merchandise recorded in the accounts?
Trade discounts are not entered in the accounting records. They are not considered to be a part of the sale because the exchange agreement was based on the reduced price.
What is the mathematical formula for calculating terms of trade?
Terms of trade = Price of Exports / Price of Imports The prices of exports and imports are usually calculated with respect to a specified base year. From that it is possible to calculate changes in the mix and the value of the trade flows to arrive at prices for the period in question.
What are the different kinds of discount?
trade discounts, cash discounts, discount series and seasonal discounts
Where is trade discounts recorded in?
Trade discounts are not entered in the accounting records. They are not considered to be a part of the sale because the exchange agreement was based on the reduced price.NB: Remember the general rule that sales are recorded when an exchange takes place. The measurement of the sale is based on the exchange price. Therefore, the amount recorded as a sale is the invoice price. The entries previously shown for a $4,000 sale would also be appropriate if the list price was $5,000, subject to a 20% trade discount.
Purchase discounts is the same as trade discounts true or false?
false
Why is trade discount not recorded in books of accounts?
Product catalogs often provide a list price for an item. Those list prices may bear little relation to the actual selling price. A merchant may offer customers a trade discount that involves a reduction from list price. Ultimately, the purchaser is responsible for the invoice price, that is, the list price less the applicable trade discount. Trade discounts are not entered in the accounting records. They are not considered to be a part of the sale because the exchange agreement was based on the reduced price.
Trade Discount will be recorded in the books of accounts?
Product catalogs often provide a "list price" for an item. Oftentimes those list prices bear little relation to the actual selling price. A merchant may offer customers a trade discount that involves a reduction from the catalog or list price. Ultimately, the purchaser is responsible for the invoice price, that is, the list price less the applicable trade discount. Trade discounts are not entered in the accounting records. They are not considered to be a part of the sale because the exchange agreement was based on the reduced price level.
Trade discounts also called functional discounts are?
yes, trade discounts is also called functional discounts I wish I could improve this answer since it does not address the actual question of what these discounts are, but I am also looking for that answer, so hopefully someone will actually take the time to read the question before answering it.
How cash discount differ from trade discount?
Trade discounts are guranteed discounts a business is getting by purchasing from a seller. Cash discounts are OPTIONAL discounts that a buyer gets if they opt to pay their bill (invoice) earlier then the due date. The seller specifies in the invoice how many days earlier a buyer has to pay their bill to get the cash discount. If a cash discount is taken, it is applied after the trade discounts, but before shipping and handling charges.
How do you figure motor vehicle excise tax for Oklahoma?
Motor vehicle excise tax in Oklahoma is 3.25% of the purchase price, which may include dealer discounts and rebates but which may not include any trade-in allowance.
