Question
A corporation has two subsidiary businesses, set up as separate legal entities. One business will purchase a new item from the other and has negotiated a discount for the first six months of the deal.
You need to make sure that the system applies the discount for the stipulated time.
Which type of agreement should you configure?
- A. Sales agreement
- B. Service agreement
- C. Purchase agreement
- D. Trade agreement Correct
Explanation
Trade agreements hold negotiated prices and discounts (line, multiline and total discounts) with From date and To date fields, so a discount journal line valid for six months is applied automatically to orders between the two legal entities and stops when the period ends. Sales and purchase agreements are commitments to buy or sell a quantity or value over a period, not the mechanism that drives automatic price and discount search. Service agreements belong to service management and do not control item discounts.
