Dear friends -
We (Seller) have sold some items of INR 100 under LC and got the LC discounted from bank (Discounting charges 5. Net amount received 95). Now regarding the Ledger account which we should 'Credit' by 95, following are the queries
(a) can we TODAY credit the Buyer a/c with 95 (and debit his a/c by 5)?
(b) should we TODAY credit a memorandum / contra account by 95, and reverse this account by crediting buyer account only on due date (because buyer will also be debiting our account only on due date). If we adopt option (b), problem in that my buyer ledger account will show 100 (whereas we have practically got the money) and we should not be chasing the buyer for money
Please help and clarify; better if there is any credible source (e.g. relevant paragraph of an Accounting Standard, or Accounting Entries in SAP / Oracle on this) which I can look at.
Rgds.
CAclubindia
