i. Cash Discount ii. Trade Discount iii. Petty Cash Book

1. Business
Document
Mudssir Raza

2. CASH DISCOUNT
Cash discount is an allowance given to a customer when an account is settled
within a time limit set by the supplier
TRADE DISCOUNT
Trade discount is a reduction in the price of goods; the rate often increases
according to quantity purchased.

3. Activity:
State 2 reasons why a supplier may allow a customer trade discount.
Explain the difference between trade discount and cash discount
1.
2.

4. A statement of
account is a
document issued
by the seller of
goods on credit to
summarise the
transactions for the
month.

5. CHEQUE
A cheque is a written order to a bank to pay a stated sum of money to the
person or business named on the order.

6. RECEIPT
A receipt is a written acknowledgment of money received and act as proof of
payment.

7. Petty Cash
Book
A petty cash book is used to record low-value
cash payments.
The imprest system of petty cash is where the
amount spent each period is restored so that the
petty cashier starts each period with the same
amount.

8. The Layout
of a Petty
Cash Book
Analysis Columns are used to divide the payments into
different categories

9. Practice Question

10. Practice Question
a. Write up Maitreyi's petty cash book for the month of November 20-1. The petty cash
book should have 4 analysis columns- cleaning, stationary, travel expenses and ledger
accounts.
b. Balance the petty cash book on 30 November and carry down the balance. Show the
restoration of the imprest on 1 December 20-1.
c. Make the necessary entries in Maitreyi's noiminal ledger and purchase ledger on 30
November 20-1

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15. Thank You