Trade Discounts Flashcard

Front

What is a trade discount?

Back

A trade discount is a reduction in the list price of a product, offered by a seller to a buyer, typically based on the volume of purchase or the buyer's status as a wholesaler or retailer.

Front

How do you calculate the trade discount amount?

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Trade Discount Amount = List Price x Trade Discount Rate.

Front

If the list price of a product is $1500 and the trade discount rate is 30%, what is the trade discount amount?

Back

$450

Front

If the list price of a product is $100 and the trade discount rate is 20%, what is the trade discount amount?

Back

$20

Front

A product has a list price of $800 and a trade discount rate of 25%. Find the trade discount amount.

Back

$200

Front

If the trade discount rate is 12% and the trade discount amount is $120, what is the list price of the product?

Back

$1000

Front

A product has a list price of $1200 and a trade discount rate of 18%. Calculate the trade discount amount.

Back

$216

Front

What is the formula to find the list price if the trade discount amount and rate are known?

Back

List Price = Trade Discount Amount / Trade Discount Rate.

Front

What is the significance of trade discounts in business?

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Trade discounts help businesses manage pricing strategies, encourage bulk purchases, and maintain competitive pricing.

Front

What is the difference between a trade discount and a cash discount?

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A trade discount is a reduction in price based on the buyer's status or purchase volume, while a cash discount is a reduction offered for prompt payment.