Answer / vijay kumar

purchases A/c Dr. 5000/-

To Credit to party 4000/-
To Discount, 1000/-

discount head create in Indirect Income head,

Answer / jubeda

PURCHASES A/C DR. XXX
TO PARTY,S A/C XXX
TO DISCOUNT A/C XXX

Answer / surekha

the first entry is wrong .
discount normally offered by creditor as part of the po
terms so an entry is required for recognising the discount
so entry 2 is ok
purchases A/c Dr. 5000/-

To Credit to party 4000/-
To Discount, 1000/-

discount head create in Indirect Income head,

Answer / jubeda

PURCHASES A/C DR. XXX
TO PARTY,S A/C XXX
TO DISCOUNT A/C XXX

Answer / h.r. sreepada bhagi

It's important to know when the discount is given. Various
entries given below with example Original Price, Rs, 10000/-
& discount 10%.

1. When discount is mentioned in the Sales Invoice, there is
no need to recognise it separately as income (Discount
Received) as it is Trade Discount. The purchase entry is:-

Purchase A/c Dr. Rs.9000/-
Supplier's (Creditor) A/c Cr. Rs.9000/-

*** If it's an asset, Asset A/c shall be debited instead of
Purchases A/c.

However, if the discount of Rs. 1000/- is given at the time
of payment, then it's recognised as an Income, as it's
treated as Cash Discount. The purchase entry is:-

Purchase A/c Dr. Rs.10000/-
Supplier's (Creditor) A/c Cr. Rs.10000/-

The payment entry for settlement of credit purchase is :-

Supplier's (Creditor) A/c Dr. Rs.10000/-
Bank/Cash A/c Cr. Rs.9000/-
Discount Received A/c Cr. Rs.1000/-

Alternatively the supplier can be debited with Rs. 9000/-
through purchase entry & discount can be accounted by
debiting the supplier and crediting the Income A/c with Rs.
1000/-

Answer / babita sharma

Purchase A/c Dr. 5000
To Party name Cr. 4000
To Discount Received Cr. 1000
Discount head creat indirect income head.

Answer / mohd. irfan

Purchase A/c Dr. xxx
TO Party name. cr.xxx
To Discount Received Cr.xxx

Answer / barodianbuddy(acca)

PURCHASE DR XX
DISCOUNT RECEIVED CR XX
PAYABLE S CR XX

Answer / kaushal

Purchase A/c Dr.
To Creditor A/c

There are no discount entry made on credit purchases.
Because discount allowed only on cash transactions

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