Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 31 - No. 37)
What is the effect on the accounting equation when a trade discount is given?
Assets increase and owner's equity increases.
Assets decrease and owner's equity decreases.
Assets remain the same and owner's equity decreases.
Assets decrease and owner's equity increases.
Explanation
Trade discounts reduce the revenue earned, which subsequently reduces owner's equity.
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