QUESTION :
zahra's budget sales for the following months are :
$
AUGUST 2017 110000
SEPTEMBER 2017 120000
OCTOBER 2017 100000
NOVEMBER 2017 140000
DECEMBER 2017 180000
40% of her customers pay in cash at the time of sale and receive a trade discount of 2%
30% of her customers pay one month after the sale and receive a cash discount of 1%
30% of her customers pay two months after the sale and do not receive any discount.
SIR IAM CONFUSED BETWEEN TRADE DISCOUNT AND CASH DISCOUNT .
CAN U EXPLAIN THIS QUESTION
Ask the Tutor ACCA MA
CASH BUDGET
7y ago#1You have not said what the question wants.
The distinction between trade discount and cash discount is irrelevant here - the customer simply pays less than the amount.
For Augusts sales, the cash will be received as follows:
In August: 40% x 110,000 = 44,000 less 2% = 43,120
In September: 30% x 110,000 = 33,000 less 1% = 32,670
In October: 30% x 110,000 = 33,000
It is a similar pattern for each of the following months.
Have you watched my free lectures on budgeting? The lectures are a complete free course and cover everything needed to be able to pass the exam well.
Sign into reply to this topic.