Business and Accounting Basics

A cash discount is a reduction of the cost of an item or service that a seller offers to a buyer to encourage cash payment for an immediate or outstanding invoice. A seller offers cash discounts to obtain cash quickly to pay off debts and invest the money back into …

A trade discount is a reduction of the list price of products from a seller to a buyer as an incentive for future business. The trade discount is given as a percentage to deduct from the list price which is the normal selling price. In order for a buyer to …

Everything in a business has its own account which falls under one of 5 types of accounts or 3 classes of accounts. The 5 types of accounts are assets, liabilities, income, capital and expenses, also known as ALICE accounts. Each account shows details of an item from the date it …

Expenses are the goods, services and charges that a business incurs as it functions. It has a debit balance in the ledger accounts when it increases and a credit balance when it decreases. The cost of expenses in relation to earned income determines whether the business makes a profit or …

The financial records of a company are important to many persons, businesses and institutions for several reasons. These users of accounting information have their own interests in the success of a business which is why accuracy is so important. Users of accounting information are divided into internal and external users. …