Please tell me entry for following bill.
Goods 500
Disc- 10% 50
----------------
Bill Amt 450
Answer Posted / 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 |
Post New Answer View All Answers
What are source documents in accounting?
how to treat investment fluctuation fund in case of death of a partner
What will be the journal entry of purchase and sale for ac purchased for 40000 vat 5% sold for 45000 vat5%
hi friends, i have simple doubt if we completed this financial year that is 2009-10 march. after that we will file it period of oct-2010.so from apr-2010 that is new f.y.what we take the opening balances without filing how can we know the exactly figures?
Define depreciation and its types?
payment voucher for advance salary
What is the procedure of submit bank guarantees and cancellation.
Tell me what do we mean by purchase return in accounting?
Journalize the Following: 1. The following were purchased on account: a. Materials $ 10,000 b. Office supplies $ 2,000 c. Small tools $ 1,000
Tell me what are the key tasks for account executive?
Are there any questions you would like to ask?
What are negative postings?What are Credit memos ?Payment Requests ?
India me ,suppose that hmare pass 190000 Rs hai,to kitna tax lgega,or kis heshab se lgega,
What is the difference between a provisions and reserves?
At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partners. (a) Policy Amount. (b) Surrender Value. (c) Policy Value for the dead partner and Surrender Value for the rest. (d) Surrender Value for all the partners.