| Basis of Difference | Trade Discount | Cash Discount |
| Meaning | It is allowed when goods are purchase or sold. | It is allowed at the time of payment. |
| Recording in books | It is recorded in invoice/bill But not in the books. | It is recorded in the discount column of the Cash Book'* debit side, if received. |
| Purpose | It is allowed to increase sale. | It is allowed for earlier payment. |
| Deduction | It is deducted from the price-list of the goods. | It is not deducted from the price-list of the goods. |
