Differences Flashcards
1
Q
How is the amount different in bank loan and overdraft?
A
Bank loan is fixed, but the bank overdraft is not and has a limit that is agreed with the bank
2
Q
How is the repayment in bank loan and overdraft different?
A
For bank loan it is usually more than a financial year but bank overdraft is within one year.
3
Q
How are bank loan and overdraft classified?
A
Bank loan is long-term borrowing under NCL and bank overdraft is classified as a current liability
4
Q
How are trade discount and cash discount different in price?
A
Trade discount deducts list price while cash discount deducts invoice
5
Q
Why is trade discount and cash discount given?
A
Trade discount encourages to buy in bulk while cash discount encourages early payment
