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| This query is : Resolved
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Chintan Patel
( Author )
29 July 2012
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hello!!! i have got a query regarding discount on debtors and creditors as to why are they recorded in P&L A/C,aren't they concerned with trading,what I mean to say is why aren't they recorded in TRADING A/C BY DEDUCTING FROM PURCHASES AND SALES RESPECTIVELY???
PLEASE EXPLAIN THIS TO ME IN DETAIL....PLS
-THANKING YOU IN ADVANCE!!!
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Siddhartha Bhardwaj
( Expert )
29 July 2012
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Trading account covers MANUFACTURING expenses. Expenses incurred to manufacture a product are covered in trading account.
Discount is NOT an expenditure incurred to manufacture but an expense to SELL a product.
Therefore, it is shown in P&L A/c and not trading A/c.
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