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unearned discount business definition
- A discount inappropriately taken by a customer when payment is made after the manufacturer's stated discount period has elapsed. For example, a company buys merchandise from a manufacturer that offers a 2% discount when payment is made within 10 days. The company taking delivery of the merchandise does not pay for 15 days, but claims the discount anyway.
- A secret discount offered to one or more customers without being offered to other customers.
- For financial institutions, loan interest deducted in advance and not yet applied to income.