We are private limited company dealing in Software sales. Suppose We are purchasing one software for Rs.5000 and we haev sold it to 2500 for one of our old customer. So how should I book 2500 Rs. Discount given?
There are two ways to pass entry for above transaction:
1) Book sales bill of Rs.2700 by editing stock item rate which may affect my stock valuation. And by year end I may not know the amount of discount I given if there are more such transaction.
2) Book sales bill of Rs.5000 and pass credit note for discount given. In this case I will have to pay more VAT as VAT will be more in Bill of Rs.5000 but we have received only Rs.2500.
Which of the above method should I follow as I have to consider VAT effect also in above transaction?
CAclubindia
