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Rebate on bill discounted

AKSHIT MALHOTRA (C.A Final Student) (1337 Points)

15 April 2013

I HAVE A DOUBT IN BANKING CHAPTER.IF AT THE END OF THE QUESTION IN ADDITIONAL INFORMATION THERE IS A ADJUSTMENT LIKE

1) REBATE ON BILL DISCOUNTED-Rs 20,000

WHAT WILL BE ITS TREATMENT IN P&L ACCOUNT & BALANCE SHEET.

MANY BOOKS HAVE DEDUCTED Rs 20,000 FROM INTEREST EARNED FIGURE IN P&L A/C.MANY HAVE ADDED THIS Rs 20,000 IN PROVISIONS & CONTIGENCIES.

PLEASE TELL ME THE RIGHT TREATMENT.

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9 Replies

rakshita (Ca final student) (84 Points)
Replied 16 April 2013

rebate on bills discounted will be deducted from the interest earned in p/l a/c since it's not this year's income and will be shown in schedule 6 OTHER LIABILITIES in balance sheet

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AKSHIT MALHOTRA (C.A Final Student) (1337 Points)
Replied 16 April 2013

THNX A LOT RAKSHITA.I HAVE ANOTHER DOUBT IN INSURANCE CHAPTER.

I'M CONFUSED THAT IN THE FORMAT OF REVENUE A/C & P & L A/C INTEREST,DIVIDEND & RENT ARE THERE.

I THINK IT SHOULD BE EITHER IN REVENUE OR P & L A/C.

PLEASE EXPLAIN.

rakshita (Ca final student) (84 Points)
Replied 18 April 2013

U r welcome. See if the question demands only revenue a/c n interest dividend n rent is given thn it will b shown as income and if question asks for both revenue and p/l then if it is clearly mentioned that certain amt of rent dividend is for fire n certain amt for marine insurance thn it will b shown in respective revenue accounts n if no specifications are given regarding the interest dividend as in how much is for fire or marine or misc insurance then such interest dividend shall be shown in p/l

1 Like

Amandeep Ravesh (student) (23 Points)
Replied 09 August 2013

Me too having same doubt in banking chapter, but with slight variance, i.e why we deduct it when we havent even added it in previous year

Amandeep Ravesh (student) (23 Points)
Replied 09 August 2013

sorry but I got it..

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Indiataxfin (service) (62 Points)
Replied 18 April 2014

What is difference between the term rebate and refund ..refer Indiantaxfin.com

GANESH MAHADEO UPALKAR (ARTICLED ASSISTANT) (256 Points)
Replied 30 May 2014

For REBATE ON BILL DISCOUNTED THREE entries are there to be made:-

1)OPENING REBATE REVERSE-REBATE ON BILL DISCOUNTED A/C DR

TO INTEREST & DISCOUNT A/C

2)CLOSING REBATE PROVIDED-INTEREST & DISCOUNT A/C DR

TO REBATE ON BILL DISCOUNTED

3) TRANSFER BALANCE OF IINTEREST & DISCOUNT TO P/L

-INTEREST & DISCOUNT A/C DR

TO P/L

NOTE:-a)discount on bills can be used instead of interest & discount a/c,if questions says specifically interst & discount A/c then used that only otherwise discount on bills a/c

b)interest & discount a/c balance transfer to P/L a/c is calculated as follows:-

opening rebate xxx

(+)discount recieved during the year xxx

(-)closing rebate (xxx)

= transfer to P/L xxx