Interested to Buy Any Domain ? << Click Here >> for more details...
What is the entry for Discount Received? & What is the
entry for discount paid?
- 13 Answers
- 67005 Views
- Azizi Bank, i4 Mobiles, WNS, I also Faced
- E-Mail Answers
Answer Posted / h.r. sreepada bhagi
As mentioned above Discount received is income & discount
allowed is an expense.
Entries depends up on substance and timing of recognition of
the income or expense. Assuming that Discounts received or
allowed are cash discounts and not trade discounts the
entries are (Eg. Rs. 1000/- is the discount received or
allowed) :-
For Discount Received:-
On recognition of Income before settlement by cash/bank
Creditor's (Vendor) A/c Debit - Rs.1000/-
Discount Received A/c Credit - Rs.1000/-
Generally, the amount will be deducted from the payables and
no separate entry for receipt will be there. However if the
bill amount has been fully paid earlier and the payee has
reimbursed the discount amount in cash or by cheque, the
entry will be :-
Bank/Cash A/c Debit - Rs.1000/-
Creditor's (Vendor) A/c Credit - Rs.1000/-
In case the discount income is recognised on receipt by
cash/Cheque/DD/Credit to a/c, as it was not known or not
recognised earlier for any reason, then the entry will be :-
Bank/Cash A/c Debit - Rs.1000/-
Discount Received A/c Credit - Rs.1000/-
For Discount Allowed:-
On recognition before settlement by cash/Cheque/DD, etc.
Discount Allowed A/c Debit - Rs.1000/-
Debtor's (Customer) A/c Credit - Rs.1000/-
As above, generally, the amount willb e deducted by teh
customer from the bills & hence seperate bank or cash entry
will not be required. However if the bill amount has been
fully received earlier and the company has reimbursed the
discount amount in cash or by cheque/DD, the entry will be :-
Debtor's (Customer) A/c Debit - Rs.1000/-
Bank/Cash A/c Credit - Rs.1000/-
In case the discount expense is recognised on payment by
cash/Cheque/DD/transfer from a/c, as it was not known or not
recognised earlier for any reason, then the entry will be :-
Discount Allowed A/c Debit - Rs.1000/-
Bank/Cash A/c Credit - Rs.1000/-
Different accounting treatment shall be made for trade
discounts. Specific entry depends up on the circumstance,
materiality and substance of the transaction. When these are
accounted while settling the bill, then a consolidated
transaction entry can be made and the income or expense be
accounted along with giving effect to Cash/Bank &
Creditor/Debtor.
| Is This Answer Correct ? | 4 Yes | 6 No |
Post New Answer View All Answers
List out some of the examples for liability accounts?
Hi, we are not a VAT register and raised not VAT bill to company for signage material. they are deducting WCT @4%, can anybody help me why they are deducting WCT while i am not a VAT register vendor, as i do not cross threshold limit.
"A" has two divisions of "B" and "c".In our system we have two vendor accounts of B&C.We have received one Non PO invoice of B and posted wrongly in C and its got paid.While reconciling the account we got this error is happend.We contacted the C and asked for refund.But C said,he transfer internally the amount directly to B and he will not refund the amount.How we will settle this entry in our books. If we reverse the entry...there is one invoice needs to be reverse and payment doc needs to be reverse..how we can settle this in our books...
Where do we show "Dividend paid in FFS ,either in FFO or in FFS? what is teh concept behind?
WHAT IS ACCOUNTING HEAD FOR TRADE FINANCE? I HAVE PAID 49268 FOR TRADE FINANCE.WHERE SHOULD I TAKE IN TALLY
Entry Tax is Central Income or State Income. Which Challan this tax deposited ? In Sale Tax Return which column is shown this tax
ABC LTD IMPORTED GOODS FROM USA FOR $20000 ON 1/1/11 AT A EXCHANGE RATE OF RS.47.55. THEY MADE A PAYMENT OF $12000 ON 15/1/11 AT A RATE OF RS.45.95. BALANCE PAYMENT WAS MADE ON 25/1/11 AT A RATE OF RS.49.10
saji become insolvant -what is journal entry
What is the definition of offset accounting?
1.WHAT IS BRS? 2.WHY DO WE PREPARE BALANCE SHEET? 3.WHAT IS TRIAL BALANCE? 4.WHAT IS VENTURE CAPITAL? 5. WHAT IS DEFFERED REVENUE EXPENDITURE?
Why did you select accounting as your profession?
whether sale and purhases of cf agent are his and he is liablte to pay VAT on sale of goods and pay the tax to govt collected by him one more being receiving commission of saleproceed during the year whose stock would be it it is of c f agent or principal manufctrurer who has send the goods to sold on his behalf
Dear sir , 1-what is diffrence local tax & vat 2 -what is sales tax. tds. service tax challan & return due date(monthly & quartly, annually) 3- what is deprecation rate in company act 4-what is income tax latest limit-
what is profit and loss(dr) in cash flow statement?
I TRANSFERRED A STOCK OF RS. 100.00 FROM HEAD OFFICE DELHI TO MFG. UNIT OFFICE AT HARYANA AGST FORM F.AT BRANCH GOODS ARE PROCESSED AND ADDED VALUE OF RS. 80.00 AND TRNF BACK TO DELHI HEAD OFFICE FOR RS. 180.00 AGST FORM F FROM HARYANA . AND HEAD OFFICE SOLD THIS TO PARTY AT RS. 200.00 . I WANT TO KNOW HOW TO MAKE ACCOUNTING ENTRIES IN BOTH BOOKS HEAD OFFICE AND BRANCH OFFICE. TO SETTEL ACCOUNT AND TO CONSOLIDATE THE BOOKS AT THE END OF YEAR.
