Fixed asset accounting

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Parvez (Querist)
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16 February 2014 Dear Sir/s,

i want to know what treatment we have to give to cash discount received on FIXED ASSET ?

i mean we have to record the cash discount as income ? , if yes then the FIXED ASSET to be recorded at total value (net payable to supplier plus cash discount), if not then which account we have to debit for cash discount received ?

rgds
parvez

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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16 February 2014 Fixed Assets to be recorded at net payable amount.

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Parvez

Parvez (Querist)
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16 February 2014 thanks again,

but can you tell me what account we have to debit for the discount earner ?

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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16 February 2014 For example you are purchasing Fixed Asset from X. Price Rs 100, Discount @ 10% i.e., Rs 10. Net amount paid by you is Rs 90/-.

Entry Will be-

Fixed Assets A/c Dr Rs 90

To X A/c Rs 90

Parvez

Parvez (Querist)
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17 February 2014 but if we have already booked invoice for Rs 100 and after 2 weeks we received cash discount from vendor , what to do ?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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17 February 2014 If received later.

Cash/Bank A/c Dr.
To Fixed Assets A/c