Mohammed Madni Razvi (4 Points)
10 February 2016WHETHER VOLUME DISCOUNT RECEIVED IS TREATED AS INCOME OR SET OFF AGAINST EXPENCE
SUPPOSE VOLUME DISCOUNT IS ON PAID BILL DURING THE FINANCIAL YEAR AND I HAVE NOT PAID 1/4 OF MY BILL , ON WHICH DISCOUNT WILL BE RECEVED NEXT YEAR ON PAYMENT
WHAT WILL BE TRETMENT
ROSHAN
(TAX PRACTITIONER)
(74 Points)
Replied 13 February 2016
Hi,
Volume discount is to be accounted as an Income.
Where as the discount which is yet to be received has to be provided as income in the relevent FY, and to be shown under current asset in the balance sheet.
Accounting Entries will be:
For Volume discount Received:
Dr sundry Creditor/Party xxxx
Cr Volume discount (Indirect Incomes) xxxx
For Volume Discount Receivable:
Dr Volume discount Receivable (Current Assets) xxxx
Cr Volume discount (Indirect Incomes) xxxx
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