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Cash Settlement Disc. received

This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.

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June 2, 2021 at 12:22 pm #622771
Kung4u62
Member
- Topics: 3
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When we receive Cash/settlement discounts,
Dr….Trade Payables.
Cr….Disc. Received (SOPL – impact is on GP or on Net Profit )
How we show it in SOPL ?? In BPP & Kaplan it says – ” Purchases less Cash Discount Rec “(showing impact on GP) but no detail given. Again in BPP chapter summary it says :”Cash/settlement discounts received are included as ‘other income’ of the period”
My query is : If it’s Other Income how is it adjusted against COS.
June 2, 2021 at 4:07 pm #622799
John Moffat
Keymaster
- Topics: 57
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They should be shown as ‘other income’ after the gross profit.
(However this is unlikely to be relevant in the exam since you cannot be asked to prepare a full SOPL 🙂 )
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