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A business had a balance at the bank of $2,500 at the start of the month. During the following month, it paid for materials invoiced at $1,000 less trade discount of 20% and settlement discount of 10%. It received a cheque from a customer in respect of an invoice for $200, subject to settlement discount of 5%.
ANSWER: $1,970Hello tutor!
I wanna ask that why are they deducting 20% trade discount from INVOICED $1,000 ?
I thought $1,000 are invoiced so 20% is already deducted and we need to deduct only 10% of settlement discount.And if we need to deduct TRADE DISCOUNT from invoiced amount than what we need to do with list price ?
Are the list price and invoiced amount same ?Trade discounts are shown on the invoice as a reduction from the list price.
The amount invoiced is the list price less the discount.
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