04 June 2016
if a supplier is giving a discount and is reflected in invoice then how the entry should be passed. if by opening a d iscount received a/c then under which group it is to be created.? if i create it under indirect income then double effect will be given as purchase will be booked at lesser amount and also income will be shown under profit and loss credit side as discount recd...
please experts guide me on the issue my previous query also went unsolved.. Thanks in anticipataion
04 June 2016
You have two alternative
1 Book purchases at full and credit discount in separate account.
2. Book sales at net amount.
In both case profit will remain same
04 June 2016
1)Recognise purchase net of discount no need to credit to discount received a/c 2)if you opened any discount received a/c for discount on purchases may be group it under purchases.you cannot claim this as indirect income always to be shown as deduction from purchases( no seperate disclosure in financials net amount is reported)
05 June 2016
Agree with Ganeshsir, 1. If discount value is written in invoice then net amount need to take as purchase value. 2. if discount need to book while paying invoice value i.e cash discount or other then it will have to take as indirect income. Dr. Party Cr. Discount/Commission.
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