Question

How do you calculate sales tax? How do you calculate a discount? Explain and give examples

Answer 1

If the sale price is exclusive of any taxation, when we can directly calculate sales tax on the receipt by multiplying.

If the sales prices are inclusive of sales tax then we will be calculating the overall receipts and we will divide the receipt by (1+sales tax), and we will detect it from total receipt.

Like for example if overall sales is 1000 and the sales tax is 10% then we will be calculating the sales tax by= 1000- (1000/1.1)= 90.9

We will calculate the discount by directly multiplying with the discounting percentage with the listed price. These are generally trade discount.

Cash discount will be specifically provided by the company.