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Please tell me entry for following bill.
Goods 500
Disc- 10% 50
----------------
Bill Amt 450
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Answer / sandhya
gooda a/c dr. 500/-
to cash a/c 450
to discount a/c 50
| Is This Answer Correct ? | 10 Yes | 1 No |
Answer / s
goods never be debited or credited instead of this we do dr. or cr. to purchase a/c hence the entry is:
purchase a/c dr. 500
to dis. a/c 50
to cash a/c 450
| Is This Answer Correct ? | 5 Yes | 0 No |
Answer / amit garde
if goods are purchased then entry should be
by goods a/c ... dr 500
to cash a/c 450
to discount a/c 50
OR
IF goods are sold then entry should be
by cash a/c ... dr 450
by discount a/c... dr 50
to goods a/c 500
| Is This Answer Correct ? | 6 Yes | 2 No |
Answer / santu
goods a/c__________________________ cr 500/-
to cash a/c____________________ dr 450/-
to dis a/c____________________ dr 50/-
__________________________________________________________
500/- 500/-
___________________________________________________________
| Is This Answer Correct ? | 3 Yes | 1 No |
Answer / srn
The treatment of discount depends on whether it is a cash discount or a trade discount. Cash discount is never recorded in the books where as trade discount is. Considering that the aforesaid discount is a trade discount then..
Entry upon booking of Invoice:
-------------------------------
Capital Work-In-Progress [BS] a/c Debit 500
Trade Discount a/c [P&L] Credit 50
Vendor Liability a/c [BS] Credit 450
A withholding tax a/c like TDS Liability a/c and WCT Liability a/c might be involved in the above txn. in which case the these a/cs will credited to the extend of withholding.
Entry when the asset is put to use:
-----------------------------------
Fixed Asset a/c [BS] Debit 500
Capital Work-In-Progress a/c [BS] Credit 500
When Payment is made to the vendor:
-----------------------------------
Vendor Liability a/c [BS] Debit 450
Bank/Cash a/c [BS] Credit 500
Notes:
Trade Discount is a discount allowed by the seller to the buyer in case of bulk purchases made by him.
Cash Discount is a reduction in the net amount payable by the buyer when prompt payment is made by the buyer.
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / s.mohan
goods a/c 500
to cash a/c 50
to discount a/c 450
| Is This Answer Correct ? | 5 Yes | 19 No |
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