Practice Question 17 on what amount is a sates discount base

Practice Question 17 on what amount is a sates discount based?h O Invoice price plus freight-in (-) Invoice less discount Invoice price plus freight-out O Invoice price less returns and allowances

Solution

The correct option is D .Invoice price less return and allowance.

Discount on sales = net invoice price * percent of discount

Net invoice price = gross invoice price - return - allowance.

Discount is based on amount of sales but return and allowance are not sale they reduces the sales amount.