Discounts may be offered on sales of goods to attract buyers. Discounts may be classified into two types:
Trade Discounts: offered at the time of purchase for example when goods are purchased in bulk or to retain loyal customers.
Cash Discount: offered to customers as an incentive for timely payment of their liabilities in respect of credit purchases.
Trade DiscountTrade discounts are generally ignored for accounting purposes in that they are omitted from accounting records.Therefore, sales, along with any receivables in the case of a credit sale, are recorded net of any trade discounts offered.
ExampleBike LTD as part of its sales promotion campaign has offered to sell their bikes at a 10% discount on their listed price of $100.Sale revenue and any accounts receivable will be recorded net of trade discount, i.e. $90 per bike.
Cash DiscountCash discounts result in the reduction of sales revenue earned during the period. However, not all customers may qualify for the cash discount. It is therefore necessary to record the initial sale and receivables at the gross amount (after deducting any trade discounts!) and subsequently decreasing the sale revenue and accounts receivable by the amount of discount that is actually allowed.Following double entry is required to record the cash discount:DebitDiscount Allowed (income statement)CreditReceivable
Debiting discount allowed ledger has the effect of reducing gross sales revenue by the amount of cash discount allowed. Consequently, receivables are credited to reduce their balance to the amount that is expected to be recovered from them, i.e. net of cash discount.
ExampleBike LTD as part of its sales promotion campaign has offered to sell their bikes at a 10% discount on their listed price of $100. If customers pay within 10 days from the date of purchase, they get a further $5 cash discount. Bike LTD sells a bike to XYZ who pays within 10 days.Before we proceed with the accounting entries, it is necessary to first distinguish between the two types of discounts being offered by Bike LTD. The 10% discount is a trade discount and should therefore not appear in Bike LTD's accounting records. The $5 discount is a cash discount and must be dealt with accordingly.
The initial sale of the bike will be recorded as follows:
$$DebitXYZ (receivable)90
CreditSales
90
As XYZ qualifies for the cash discount, the following double entry will be required to record the discount allowed:
$$DebitDiscount Allowed (income statement)5
CreditXYZ (receivable)
5
The above entries have resulted in sales of Bike LTD being reduced to $85 (100-90-5). The receivable from XYZ has also been reduced to this amount effectively. wriiten by nana tweneboah kodua (prisdark academy)
Algorithmic trading is the process of auto-trading using automatic systems. Computers can instantly trade automatically using specific algorithms in order to create an efficient trading structure.
Fraudulent financial dealings, influence peddling and corruption in governments, brokers not maintaining proper records of customer trading, cheating customers of their trading profits, unauthorized transactions, insider trading, misuse of customer funds
"Algorithmic trading is basically automated trading. It requires specialized skill sets unique to the finance and trade industries, in addition to the technical abilities necessary to execute (or learn to execute) the complicated internet protocols."
Performance bond A surety bond between two parties, insuring one party against loss if the terms of a contract are not fulfilled. Usually part of a construction contract or supply agreement.
John has numerous of trading cards for his friends.
1 billion equable whats?
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Trading businesses and service businesses
Credit given by stockbrokers IS margin trading.
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commodity trading is the trading of primary products on exchange. spot trading and future trading of comodities are done to take advantage of difference between current and future prices.
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it allowed trading
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In the word of discount houses I think it is a financial company that is engaged in terms of trading and in bills.
Trading is used to acquire goods from the people who produce them, and the retail sales business is how these goods are then sold to the general public.