Shall Trade discount be recorded in Entries of Sales and if it is wrong what are its consequences
ashish gupta
( student)
(1922 Points)
Replied 02 November 2009
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
triumph-CMA
(Chartered Accountant)
(503 Points)
Replied 03 November 2009
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.
triumph-CMA
(Chartered Accountant)
(503 Points)
Replied 03 November 2009
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