Purchase discount definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Purchase discount can be defined as: Term used by a purchaser to describe a cash discount granted to the purchaser for paying within the discount period. Purchase discount is a discount reducing the purchase price. When thinking about purchase discounts we need to keep in mind which side of the transaction we are on. Are we the purchaser receiving a purchase discount or are we the seller granting a purchase discount? This seems obvious and is obvious in real life but it be confusing to know if we are receiving the purchase discount or granting a purchase discount when talking about book problems.
