When a large quantity of merchandise is purchased, a reduction allowed on the sale price is called a trade discount.

Name: When a large quantity of merchandise is purchased, a reduction allowed on the sale price is called a trade discount.
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This statement is true. A trade discount is a reduction offered by a seller to a buyer when a large quantity of merchandise is purchased. It is not the same as a cash discount, which is a reduction offered for paying a bill early.

When a Large Quantity of Merchandise Is Purchased, a Reduction