A sizable reduction from the list price of merchandise purchased that is NOT recorded on the buyers books.

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A trade discount is a reduction from the list price of merchandise purchased that is NOT recorded on the buyer's books. It is typically used as an incentive for a buyer to purchase larger quantities or to establish a long-term relationship with the seller. Sales discounts and purchase discounts are both recorded on the buyer's books, while a purchase adjustment is not a common accounting term.

A Sizable Reduction from the List Price of Merchandise Purchased