A sales invoice shows 20 items priced at £200 less trade discount of 10%. A cash discount of 5% is allowed if payment is received within 30 days. Which figure will be entered as a sale in the books?

Question

Quizplus · Accepted Answer

The sale is recorded at the amount after the trade discount but before the cash discount. The trade discount is 10% of £200 * 20 = £4000, so the sale amount is £4000 - £400 = £3600. The cash discount is not considered until payment is received, so the sale is recorded at £3600.

A Sales Invoice Shows 20 Items Priced at £200 Less