Discount accounting
This query is : Resolved
18 January 2010
While purchasing goods sometimes supplier give Cash discount whether fixed or on a certain percentage basis
My query is what is proper treatment
E.g. Purchase - Rs 100/-
Discount - Rs 10/-
Net Payment-Rs 90/-
Option 1) Debiting purchase by Rs100/- & open a separate a/c "Discount" & crediting Rs10/-
Option2) Debiting purchase by Rs90/- ?
Is the treament changes if discount received is
1) recurring/regular basis
2) non-recurring?
Thanks
My query is what is proper treatment
E.g. Purchase - Rs 100/-
Discount - Rs 10/-
Net Payment-Rs 90/-
Option 1) Debiting purchase by Rs100/- & open a separate a/c "Discount" & crediting Rs10/-
Option2) Debiting purchase by Rs90/- ?
Is the treament changes if discount received is
1) recurring/regular basis
2) non-recurring?
Thanks
18 January 2010
If it is a trading discount, entry will be
Pur Dr 90
to Bank Cr 90
If other discount
The entry mentioned by you
Pur Dr 90
to Bank Cr 90
If other discount
The entry mentioned by you
18 January 2010
ACCOUNTING PRINCIPLE REGARDING CASH DISCOUNT :
Always treat it separately.
ANALYSIS OF CASH DISCOUNT :
It shows the cash richness of the firm when shown separately.
Always treat it separately.
ANALYSIS OF CASH DISCOUNT :
It shows the cash richness of the firm when shown separately.
18 January 2010
Agree
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- Tds on commission charges
- GST ITC REVERSE
- TDS on Complimentary "Desi Ghee and Gold Coin" Provided to KBC Contestants
- Applicability of GST on Salary Reimbursement Component
- Need Professional Opinion AY 2012-13 Old Demand
- Withdrawal in cash from partners capital account by partner
- FAST-DS Scheme - Foreign Assets
- Regarding Applicability of Tax Audit u/s 44AB
- RCM ISSUE ON RENT AND TRANSPORTATION CHARGES
- CHECK RELATED
- Dep. as per companies act
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Starting trading business
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
Quick Links
ARTICLESHIP
21 September 2026
CA Article Assistant
KK & Company Chartered Accountant
Pune
CA Inter
View Details
09 September 2026
Semi Qualified CA / CA Inter - 2 Groups Cleared
Getmyca Consultant Pvt Ltd
New Delhi
CA Inter
View Details
ARTICLESHIP
01 September 2026
Articles
Saini Pati Shah & Co LLP, Chartered Accountants
Mumbai
CA Foundation
View Details
09 September 2026
SENIOR AUDITOR & ACCOUNTS MANAGER
Anupam Parashar & Co.
Ghaziabad
CA Final
View Details
CCI
Pro
CAclubindia
