Hi to all,
Please note the following transaction:
A Item is billed of Rs 100 and 10% discount on it, and vat 4% on discounted amount:
Item price : 100
Discount 10% = 90
VAT Rate : 4% ( on 90)=3.6
Payment by Cash
I am new to accounts and I think the enty will be like it:
---------------------
Cash Dr 93.6
Item Sales A/C Cr 90
VAT A/C Cr 3.6
-------------------
I want to record Discount details of Rs 10 (10%)
What will be entries of it ?
Thanks
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
| Originally posted by :Parmjeet Kumar | ||
| " | Hi to all, Please note the following transaction: A Item is billed of Rs 100 and 10% discount on it, and vat 4% on discounted amount: Item price : 100 Discount 10% = 90 VAT Rate : 4% ( on 90)=3.6 Payment by Cash I am new to accounts and I think the enty will be like it: --------------------- Cash Dr 93.6 Item Sales A/C Cr 90 VAT A/C Cr 3.6 ------------------- I want to record Discount details of Rs 10 (10%) What will be entries of it ? Thanks |
|
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 ?
?
| Originally posted by :sanjay agrawal | ||
| " | 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 |
" |
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
CAclubindia
