A
discount which is allowed by seller to buyer at the time of payment of credit
purchases is called cash discount.
For
example: Aslam purchase a book from Asif on credit for Rs. 1000, on the
condition that he will make payment after 2 month, Asif (seller) give chance to
buyer if he make payment in one month then discount will be allowed at the rate
10%. Aslam make payment before one month.
Discount=
1,000 x 10/100 =100
Aslam
will record Rs. 100 as discount receive and Rs. 900 for payment.
Types of Cash
Discount
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