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Discount allowed and discount received


discount allowed and discount received

sold by adding 15 profit to Avinash trader on credit. Overview of the Discount Allowed and Discount Received. It is the easy method to change in prices without reprinting of cantaloupes. The source documents, the subsidiary books, the Cash Book. Advantages of Cash Discount To the seller : Seller received the amount within a stipulated time because cash discount is allowed only if the customer makes the payment within the specified period.

28000, discount Allowed account. 13 Hari Returned Goods. Here journal entry will be, suresh  Dr 75000 To Sale A/c 75000 (being goods sold to Suresh) Now cash received from sure  Rs 58,800 after receiving cash discount. Secondly, it will help to increase working capital for day to day expenses. The examples just noted for a discount allowed also apply to a discount received. 15 Received cash from Hari. Discount allowed  must be recorded both vendor and buyers journal. In Vendor book, it is treated as discount allowed and this cash discount will become loss of business and in the day book of buyer, it will become discount received account which income account.

When the seller allows a discount, this is recorded as a reduction of revenues, and.
Discount allowed is discount given to customers or debtors and discount received is discount received from sellers or creditors.
I've always been lead to believe that discount received is credit (income) and discount allowed is debit (expense)- which is confirmed in my BAI.

Possibility of cash discount is minimized prompt payment reduces the clerical work of maintaining of debtors accounting and of sending a frequent reminder to debtors. In other words, it is encourage to buyer for buying with cash rather than buying on credit. Here journal entry for the same will be Cash A/c Dr 58800 Discount Allowed A/c. Dr To Purchased A/c 900 (being goods returned ) paid cash. Cash A/c 10,350, discount Allowed A/c 1150, to Avinash Trader A/c 11500 ( being cash received from Avinash Trader). (being goods purchased trade discount received) Returned goods. 5000 and Discount allowed to him.

discount allowed and discount received

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