Trade discount and cash discount: Class 11 practice
Trade discount is a reduction in list price and is not recorded in the books. Read the method, follow the three worked examples, then try the six questions.
What you should know first
- Percentages
The idea behind trade discount and cash discount
Trade discount is a reduction in list price and is not recorded in the books. Cash discount is allowed for prompt payment and is recorded as discount allowed/received.
Step-by-step method
- Deduct trade discount from list price first.
- Cash discount is on the invoice amount (after trade discount).
- Amount paid = invoice − cash discount.
Worked example 1 (Basic)
Goods listed at ₹53,000 are sold at 5% trade discount. What is the invoice value?
- 53000 × 95%
- Answer: ₹50,350
Worked example 2 (Standard)
Goods listed at ₹14,000, 15% trade discount, and 3% cash discount for paying immediately. How much cash is received?
- Invoice = ₹11,900
- Cash discount = ₹357
- Answer: ₹11,543
Worked example 3 (Challenge)
Goods listed at ₹54,000, 5% trade discount, and 5% cash discount for paying half the amount immediately. How much cash is received now?
- Invoice = ₹51,300
- Half = ₹25,650, discount ₹1,283
- Answer: ₹24,368
Common mistakes and misconceptions
- Recording trade discount
- Taking cash discount on the list price
Practice questions
- (Basic) Goods listed at ₹21,000 are sold at 15% trade discount. What is the invoice value?
- (Basic) Goods listed at ₹22,000 are sold at 10% trade discount. What is the invoice value?
- (Standard) Goods listed at ₹56,000, 10% trade discount, and 3% cash discount for paying immediately. How much cash is received?
- (Standard) Goods listed at ₹33,000, 20% trade discount, and 3% cash discount for paying immediately. How much cash is received?
- (Challenge) Goods listed at ₹42,000, 5% trade discount, and 3% cash discount for paying half the amount immediately. How much cash is received now?
- (Challenge) Goods listed at ₹45,000, 10% trade discount, and 2% cash discount for paying half the amount immediately. How much cash is received now?
Answer key with full working
- Q1: 21000 × 85% → Answer: ₹17,850
- Q2: 22000 × 90% → Answer: ₹19,800
- Q3: Invoice = ₹50,400 → Cash discount = ₹1,512 → Answer: ₹48,888
- Q4: Invoice = ₹26,400 → Cash discount = ₹792 → Answer: ₹25,608
- Q5: Invoice = ₹39,900 → Half = ₹19,950, discount ₹599 → Answer: ₹19,352
- Q6: Invoice = ₹40,500 → Half = ₹20,250, discount ₹405 → Answer: ₹19,845
Syllabus note
This skill is listed under "Recording of Transactions" for Class 11 in the NCERT/CBSE books. ICSE, IGCSE, IB and state boards may teach it in a different chapter or year.
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.
Related practice and notes
Frequently asked questions
Which chapter is trade discount and cash discount in?
"Recording of Transactions", Class 11 Accountancy (NCERT/CBSE). Other boards may place it differently.
How were the answers checked?
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.