Entry of Discount

Save Share

This query is : Resolved

Quick Summary

This discussion explores the correct accounting treatment for a £10,000 discount offered by supplier A to buyer B. The consensus suggests that the discount should be deducted directly from the related professional charges expense. Alternatively, it could be recorded as other income, but reducing the expense is considered the better practice for accurate financial reporting.

motilal

motilal (Querist)
Follow

14 February 2023 Dear sir,
A has raised a bill to B as follows:
Profession charge- 100000
Add GST @18% - 18000
Total Payable- 118000
Less Discount -10000
Net payable- 108000

In the Books of B - what will be treatment of 10000 as discount ?

Please guide me?
Regards,
Motilal Verma

CA Altamush Zafar

CA Altamush Zafar (Expert)
Follow

14 February 2023 It should be reduced from expenses. Alternatively it can be shown as other income. But better treatment is to reduce it from related expenses.

Message likes : 1 times