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Discussion > Accounts > A/c entries >

Doubt about discount received

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CA-Article

[ Scorecard : 375]
Posted On 24 May 2012 at 12:17 Report Abuse

if we received discount (not trade discount) what will be entry for the same.

1) Party a/c debit           Rs.XXX

          To Discount Received a/c          Rs.XXX

(Being discount recd against bill.no. abc123)

OR

2) Party a/c debit          Rs.XXX

       To Purchase a/c                           Rs.XXX

(Being discount recd against bill no. abc123)

ABOVE WHICH ENTRY IS CORRECT PLEASE EXPLAIN

MOST URGENT

 

Note:1)ignore vat

          2) Discount received under Indirect income (profit & Loss a/c)

           3) Purchase under Trading a/c

          4) Party Sundry creditor.

 

 



sanket
FINANCE MANAGER

[ Scorecard : 51]
Posted On 24 May 2012 at 12:49

Below is the correct entry.

Party A/c Dr

     To disc recd Cr




sanket
FINANCE MANAGER

[ Scorecard : 51]
Posted On 24 May 2012 at 12:51

Below is the correct entry.

Party A/c Dr

     To disc recd Cr



CA ADITYA SHARMA
CA IN PRACTICE

[ Scorecard : 16259]
Posted On 24 May 2012 at 13:44

1st entry is correct one



GANESHAN
CA-Article

[ Scorecard : 375]
Posted On 24 May 2012 at 13:56

But sir, a ca of the company where discount recd problem arise. he told me that 2nd entry is correct. is he correct? pl guide i m confused



Venkateswara Rao Sapare
Accountant

[ Scorecard : 1487]
Posted On 24 May 2012 at 14:23

Originally posted by : GANESHAN

 

 


if we received discount (not trade discount) what will be entry for the same.

1) Party a/c debit           Rs.XXX

          To Discount Received a/c          Rs.XXX

(Being discount recd against bill.no. abc123)

OR

2) Party a/c debit          Rs.XXX

       To Purchase a/c                           Rs.XXX

(Being discount recd against bill no. abc123)

ABOVE WHICH ENTRY IS CORRECT PLEASE EXPLAIN

MOST URGENT

 

Note:1)ignore vat

          2) Discount received under Indirect income (profit & Loss a/c)

           3) Purchase under Trading a/c

          4) Party Sundry creditor.

 

1) Both entries may be considered.

2) First entry is observed, where it is essential to understand how much amount is accounted under the head 'Discount Received'

3) On finalisation the very amount will get set off against the Purchases, to understand the Net Value of Purchases.

4) Point 3 above is carried on in your Second Entry.

 



 

 



vijay
CA FINAL

[ Scorecard : 649]
Posted On 24 May 2012 at 16:48

1st entry is correct

The 2nd entry is correct when discount received is Trade discount where we directly adjust discount amount with purchase.


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