Query

This query is : Resolved

Share Report Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2014 What is the accounting treatement when credit note is recevied from suppliers

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

10 February 2014 you need to reverse the purchase a/c or credit purchase return a/c and debit the supplier's a/c.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2014 my question is for example when i buy goods for 100000 in next month pricess of goods may decerase then supplier will send me for the decrease amount
when i buy purchase A/c
To supplier account
when credit note is recevied to decerase the amount due of supplier
supplier A/c Dr
what we have to take for credit

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

10 February 2014 in such a case, you may put it to discount A/c

Querist : Anonymous

Querist : Anonymous (Querist)

10 February 2014 how it is discount u mean discount recevied then it will effect p&l account it is not a income for me then why i have to show in discount

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

10 February 2014 how is it not...you dont want to reduce the purchase A/c...the impact has to be given:

lets say initial cost was Rs 1000

now on account of credit note the cost has been reduced to 900. so either you reduce the purchase cost or park it as discount. the effect in profit & loss a/c shall be the same.

even you dont do anything. when you settle the account the remaining balance will still reflect as income on account of extinguishment of liability to the extent of Rs 100..

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now