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Recognition and Measurement of Accounts Receivable Trade discounts Sellers often offer trade discounts to customers to adjust the sales prices of items listed in the
Recognition and Measurement of Accounts Receivable Trade discounts Sellers often offer trade discounts to customers to adjust the sales prices of items listed in the catalogue. This can be an incentive to purchase larger quantities, as a benefit of being a preferred customer or because costs to produce the items for sale have changed. Recognition and Measurement of Accounts Receivable For example, If a plumbing manufacturer has a catalogue or list price of OMR1,000 for a bathtub and sells it to a plumbing retailer for list price less a 20% trade discount, the sale and corresponding account receivable recorded by the manufacturer is OMR 800 per bathtub. Recognition and Measurement of Accounts Receivable Trade discounts Sellers often offer trade discounts to customers to adjust the sales prices of items listed in the catalogue. This can be an incentive to purchase larger quantities, as a benefit of being a preferred customer or because costs to produce the items for sale have changed. Recognition and Measurement of Accounts Receivable For example, If a plumbing manufacturer has a catalogue or list price of OMR1,000 for a bathtub and sells it to a plumbing retailer for list price less a 20% trade discount, the sale and corresponding account receivable recorded by the manufacturer is OMR 800 per bathtub
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