A reduction in the catalogue price of an article given by a wholesaler to a retailer is called a?
Answer Details
A reduction in the catalogue price of an article given by a wholesaler to a retailer is called a trade discount.
A trade discount is a reduction in the list price of a product or service offered to a customer. It is a common practice used in business-to-business transactions to encourage larger purchases or to establish relationships with customers.
In the context of a wholesaler and retailer relationship, the wholesaler may offer a trade discount to the retailer in order to encourage the retailer to purchase more of their products. The trade discount is usually a percentage off the catalogue price of the product.
For example, if a product has a catalogue price of ₦1,000 and the wholesaler offers a 10% trade discount, the retailer would only pay ₦900 for the product. The trade discount is not recorded as a separate entry in the accounting records, but is instead reflected in the purchase price of the product.
Therefore, the answer is option (B) trade discount.