Discount allowed on scheme sale
This query is : Resolved
19 August 2015
Dear Sir,
I am working in a Manufacturing concern of readymade Garments, which sales on SOR (Sale or Return Basis) to MBO's(Multi Brand Outlates.
And after selling these readymade garments we offer Discount on Schemes (Like 50% Off on MRP).
We raised invoices on Full value as we are unable on the date on issuing Invoice, the exact value of such type of Discount.
Please advice me how to account this Discount in our books of Accounts, like a Trading Part or P & L Part in the final accounts.
Waiting for Quick Reply.............
I am working in a Manufacturing concern of readymade Garments, which sales on SOR (Sale or Return Basis) to MBO's(Multi Brand Outlates.
And after selling these readymade garments we offer Discount on Schemes (Like 50% Off on MRP).
We raised invoices on Full value as we are unable on the date on issuing Invoice, the exact value of such type of Discount.
Please advice me how to account this Discount in our books of Accounts, like a Trading Part or P & L Part in the final accounts.
Waiting for Quick Reply.............
Amol S Joglekar
(Expert)
19 August 2015
You need to design a consistent accounting system for the same.
Basically tell me if full value means MRP?
Sale on returnable basis accounting is quite similar to sale on consignment basis accounting.
The frequency of noting the DSR from these multi brand outlets will decide the booking of actual sales in your books of accounts.
Basically tell me if full value means MRP?
Sale on returnable basis accounting is quite similar to sale on consignment basis accounting.
The frequency of noting the DSR from these multi brand outlets will decide the booking of actual sales in your books of accounts.
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19 August 2015
Thanks For Replying.........
Dear Sir,
Noted that these Multi-Brands Outlets works on Margin Basis.
And We book sale After deducting their Margin in our Books of Accounts.
And on the Basis of their Daily Sale Report we Book the Discount Allowed on Scheme Sale.
Kindly Advice me How this Discount can be accounted in our Books of Accounts, as this is a part of Trading A/c or P & L A/c?
Waiting for prompt Reply..........
Dear Sir,
Noted that these Multi-Brands Outlets works on Margin Basis.
And We book sale After deducting their Margin in our Books of Accounts.
And on the Basis of their Daily Sale Report we Book the Discount Allowed on Scheme Sale.
Kindly Advice me How this Discount can be accounted in our Books of Accounts, as this is a part of Trading A/c or P & L A/c?
Waiting for prompt Reply..........
20 August 2015
Refering to the above query.....
Please advise me that this discount allowed on scheme sale is whether to be shown in Trading a/c or in P&L a/c with proper clarification.
Please advise me that this discount allowed on scheme sale is whether to be shown in Trading a/c or in P&L a/c with proper clarification.
Amol S Joglekar
(Expert)
20 August 2015
You are in Manufacturing concern of readymade garments. Why do you call it a Trading A/c rather than Manufacturing A/c?
Anyway, the point is clear....Discount should go to Trading a/c so as to find out a "true and correct" % of gross profit
Just a curiosity...are you using any ERP software?...
Because that might ease out the accounting work....when you invoice the goods to MBO, since it is on returnable basis, no need to invoice...you can send it through pro-forma invoice and show it as stock transfer from your factory to MBO... your views please.
Anyway, the point is clear....Discount should go to Trading a/c so as to find out a "true and correct" % of gross profit
Just a curiosity...are you using any ERP software?...
Because that might ease out the accounting work....when you invoice the goods to MBO, since it is on returnable basis, no need to invoice...you can send it through pro-forma invoice and show it as stock transfer from your factory to MBO... your views please.
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