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Advantages

  • You can buy the stock and pay later when you have sold the stock and made enough money to pay them back
  • Eases the cash flow as you can pay after 28-30 days

Disadvantages

  • If you do not pay them back on time you can build up a bad credit history
  • Only companies with good credit history can be accepted the trade credit grant
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Q: What are the disadvantages of trade discount?
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Related questions

What is a single trade discount?

a single trade discount is just that one trade discount.


What is the Difference between trade discount and discount allowed?

trade discount is for trade customer (who has an account with the supplier) discount allowed is for walk in customers (no account holders)


What is a trade discount?

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.


What is the difference between a single trade discount and trade discount series?

What is the difference between a single trade discount and trade discount series? In: http://wiki.answers.com/Q/FAQ/2547-72 [Edit categories]


Differentiate between cash discount and trade discount?

Cash discount is a discount offered by a seller to a buyer for paying earlier than the due date, whereas a trade discount is a discount provided by a seller to a buyer based on the quantity or value of goods purchased. Cash discount reduces the actual amount to be paid, while trade discount is deducted from the list price before calculating the invoice amount.


What is the Different between a single trade discount versus a discount series?

Describe the difference between a single trade discount versus and discount series and give an example


Difference between trade discount and cash discount?

A trade discount occurs when an item is offered along with another item that is paid for. A cash discount is a reduction in the price of an item.


Bring out the difference between trade discount and cash dicount?

Cash discount is the discount in amount in accounts payable while trade discount is on sales price discount which is not recorded in business books and transaction is recorded at discount price.


What is trade and cash discount?

Trade discount is the discount which is in actual sale price of unit at the time of sales and never shown in books of accounts. Cash discount is the discount in value of accounts receivable after sales completed.


What is the trade discount amount and net price of an invoice of 5678 at a 25 percent discount?

The trade discount of 5678 with a 25 percent discount would be 4258.50. This is considered to be a math problem.


What is difference between cash discount and trade discount?

cash discount enable the buyer to pay promptly while trade discoint is a discount given to the buyer so that he can buy more goods


Define quantity discount trade discount and cash discount and explain the importance of discount for the business in terms of marketing?

quantity discount and trade discount are the same thing. it is used when the dealer wants to sell in bulk. while cash discount is given when he wants prompt payment.