FAQ

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

Discounts are offered by sellers of goods and services to incentivize buyers and speed-up the cash collections process. Trade and cash discounts each have advantages related to generating revenue and enhancing cash flow. Below are the differences between these techniques and how they impact the bottom-line. Trade Discount Definition Sellers in business-to-business transactions will offer …

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What is the difference between perpertual and periodic inventory systems?

Recording inventory transactions such as inventory purchases may be simple or complex, given the size of a business and the resources available to the accounting department. The needs of financial statement users, along with applicable accounting standards, also factor into the recordation process. The perpetual and periodic inventory systems are viable options for recordkeeping purposes, …

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What is a Single Step Income Statement?

When gauging the performance of an organization, the income statement helps illustrate profitability, major expenses and business trends. The level of detail needed on an income statement varies depending on the circumstances and report users. The single step statement is the simplest format and has advantages relative to the multi step statement, especially for a …

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