Discounts and Coding Flashcards
What is a discount and what are the different types of discount?
A discount is the reduction of the price of the goods or services. The different types are a Trade discount, a Bulk discount and a Prompt Payment discount.
What is a Trade discount?
A definite amount deducted from the list price of goods for some supplies. This is intended to encourage and reward customer loyalty and is usually on the invoice.
What is a Bulk discount?
Similar to a trade discount except it is only given if the sales order is above a certain quantity.
What is a Prompt Payment discount?
This is offered to customers in order to encourage early payment of invoices, meaning that the payment required for an invoice can be reduced if paid within a set amount of days.
What are the advantages of having a coding system in accounting records?
Information is found more quickly and it is able to file similar documents together. Codes can also be a mixture of letters and numbers (alphanumeric codes).
What are the different types of codes?
Ledger code, Customer account code, Supplier account code and Product code.
What is a Ledger code?
A unique reference given to different types of income, expenses, assets and liabilities.
What are Customer account, Supplier account and Product codes?
They are all unique references given to each individual customer (Customer account), supplier (Supplier account) and each type of product (Product code).
