Discount entries

i think the entry  will as under....

Cash a/c........Dr,               93.60

Discount a/c.......DR,         10.00

To Sales a/c                                          100.00

To  Vat a/c                                               3.60

The entry is correct. Only Discount given/paid should be there.

Discount given and discount received should be separate accounts for accounting purpose.

Dear Sanjay, Nachiket

according to sanjay's entry, sale increased

without VAT = 100

with VAT (100+3.6) = 103.6

but according to me without sale is 90 (so the VAT 3.6 is made on it)

Cash a/c.............................Dr,          93.60

Discount Allowed a/c.......DR,         10.00

To Sales a/c                                                    100.00

To  Vat a/c                                                            3.60

Regards

Bala

www.cogzidel.in

If it is a Trade discount it should not be recorded
 

and it is cash discount

Entry to book Cash Discount will be

Discount A/C....................Dr         10

     To Sale                                                10

cash a/c Dr   93.60

Discount A/c Dr 10.00

Sale A/c Credit    100.00

Vat Credit            3.60

Thanks for all of you to helping me, I am account learner

According to my first post, I want to clear more:

10% is Trade Discount, but all of you said trade discount

should not recorded. Okey.

But I want to record Trade discount so I can keep track of all trade discounts given.

I am thinking of this kind of entry in my mind ( it is a picture in my mind)

 ----------------------------------------------------------------------------

Cash                                                             Dr   93.6

ABC A/c ( like trade discount given)        Dr   10.0

To  Sales A/c                                                       90.0

To VAT A/c                                                              3.6

To XYZ A/c (some A/c to balance ABC A/c)    10.0

  ----------------------------------------------------------------------------

I donn't know what will be ABC A/c and XYZ A/c, but doing so

I will be able to see ledger of ABC A/c which will help me to know the

trend of Trade discount in buisness

Note : as other masters told in theire posts, Sale A/c entry to 100.0 ,

but Sale is of 90.0 (that's why 4% VAT is 3.6 not 4.0)

I found this forum on net-search and home masters will help me.

Thanks

Not any one to HELP ?

?

In this entry The vat component doesnt tally ! i.e. vat is not  4% of sales

what can be done in that case?

please reply!

thanks,

regards,

pratik