Fixed assets
This query is : Resolved
19 March 2013
IS CASH DISCOUNT RECEIVED ON PURCHASE OF FIXED ASSET WILL BE DEBITED TO PROFIT OR LOSS ACCOUNT OR NOT.
19 March 2013
Cash discount is not recorded.....book the amount at which fixed assets has been purchased....Say on Fixed assets worth Rs.100000/- you were given 5000/-cash discount then record the asset on 95000/-entry will be:-
Fixed Asset Dr............95000
To cash/bank.................95000
Fixed Asset Dr............95000
To cash/bank.................95000
19 March 2013
But you were given bill of Rs 100000/- and Rs 5000/- is Cash Discount which you have received because of Earlier Paymemt then what you will do.
19 March 2013
Ask the vendor to mention the discount in the bill....
19 March 2013
And its very strange that you have make the payment of 95000 and vendor has given you bill of Rs.100000/-
19 March 2013
Nothing is Strange. The Terms and conditions were that if you make payment within 15 Days you will received discount of Rs 5000/-. else you have to pay Rs 100000/- Its is cash discount and not trade discount.
19 March 2013
Mr.gaurav vendor can mention the discount paid in the Invoice....generally it happens when cash discount is paid....invoice is prepared as:-
Fixed Assets....................100000
(-)Cash Discount...............5000
Net payment.........................950000
Fixed Assets....................100000
(-)Cash Discount...............5000
Net payment.........................950000
19 March 2013
At the time of issuing the bill do the vendor know that i am going to make the payment within 15 days or should i ask him for revised Invoice.
19 March 2013
Ask him to mention the discount in the invoice.....
19 March 2013
Same can be deducted from respective asset account not to P&L.
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