Compare and contrast the following terms: a. Trade discount and sales discount. b. FOB shipping point and FOB destination
a. Sellers quote prices in different ways. Many manufacturers and wholesalers quote prices as a percentage (usually 30 percent or more) off their list or catalogue prices. Such a reduction is called a trade discount. In some industries, it is customary to give a sales discount for early payment. This means that the buyer can reduce the amount paid (often by 1 - 2%) if they make prompt payment within a short time period. In short, a trade discount applies to the list or catalogue price, whereas a sales discount applies to the sales price
b. FOB shipping point means that the seller places the merchandise "free on board" at the point of origin and the buyer bears the shipping costs. The title to the merchandise passes to the buyer at that point. FOB destination means that the seller bears the transportation costs to the delivery point. The seller retains title until the merchandise reaches its destination and usually prepays the shipping costs, in which case the buyer makes no accounting entry for freight.
You might also like to view...
What element of the motivation process is explained by intending to work for some period of time to achieve objectives?
A. directed B. maintained C. activated D. energized
Which of the following statements about business gratuities is accurate?
a. Rules involving business gratuities are rarely included in codes of conduct. b. They are essentially the same thing as bribes. c. They can only be received by customers from suppliers. d. They can be given from suppliers to customers.
Hofstede’s five dimensions on which culture differs include all of the following except ______.
A. uncertainty avoidance B. masculinity-femininity C. performance orientation D. long-term-short-term orientation
Bob and Mary start traveling toward each other from 480 miles apart, each moving at the same speed. They meet after four hours. How fast were they each traveling?