Get 3 Yrs of CCI Pro Membership at Greater Value. Subscribe Now!

Volume discount

473 views

Save Share

Mohammed Madni Razvi

21 Points Posted on 10 February 2016

WHETHER 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

Replies (1)

ROSHAN

TAX PRACTITIONER

63 Points Posted on 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