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When we receive Cash/settlement discounts,
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.
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 🙂 )