I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

 EXAM FOCUS POINT 

Students often get confused between cash/settlement and trade discounts. Exam questions could easily 

contain both types of discount so you must be able to distinguish between them and account for them 

correctly. Remember that: 

 

A trade discount is a reduction of the price that the goods/services are sold for.  

 A 

cash/settlement discount is a reduction of payment of an invoice if paid by cash, or within a 

certain period. 

 A 

discount allowed is one of the above discounts you give to a customer on a sale. 

 A 

discount received is one of the above discounts you receive from a supplier on a purchase.

BPP Tutor Toolkit Copy

---