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prompt pymt dis.

This query is : Resolved 

24 February 2009 if we gives prompt pymt dis. to exort customers, dis should be debited to p&L or deducted from sales.
As nt a trade dis. should be debited to PL instead of reducing from sales.
But is there any backup fr this?? is the treatement we gives in PL is covered anywhere in AS or elsewhere??

25 February 2009 Prompt payment discount are always in nature of cash discount and should be charged off to PL as Discount expense.

This is based on GAAP and guidance avaliable as per notes to schedule VI 9 on profit & loss account) of the Companies Act.






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