Discounts Flashcards
1
Q
What are 2 types of discount ?
A
Trade discount
Settlement/cash discount
2
Q
Is trade discount recorded separately?
A
No, it is deducted at point of sale
3
Q
How discounts affect p/l ?
A
Discount received - reduces COS
Discount allowed-reduces revenue
4
Q
What is variable consideration?
A
When seller doesn’t know if customer pays full or discounted price when sale is recorded
