Shall Trade discount be recorded in Entries of Sales and if it is wrong what are its consequences
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Trade Disounts should not be entered in books and Sales after such discoutn should only be entered . Entering trade disount will distort the value of sales
Goods must me recorded only at cost. Cost is the amount that is paid to acquire goods.
For example.
Selling price of goods Rs. 100
Trade Discount 20%
Amount paid Rs. 80.
Since Rs. 80 paid to acquire goods, hence, goods are to be recorded at Rs. 80 in the books.
Thats why Trade Discount is not recorded in Books.
From the point of view of sales.
Trade discount is not recorded and entry is made with the amount realised.
I am agree with
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