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When a sale is made with trade and cash discounts what is the account that only includes trade discount and ignores cash discount (if paid within a certain amount of time).
Also when a sales return is made that was sold with both these discounts what is the figure that is used in the sales returns and cash account?
thanks again
When the sale is made, the amount of the invoice is after the trade discount only.
This net of discount amount is Dr Receivables Cr Sales.If the goods are returned then the same amount is used to Cr Receivables and Dr Sales returns.
The cash discount is only ever accounted for when the cash is received (assuming that they pay on time). Since here the customer is not paying (because they are returning the goods) the cash discount is irrelevant throughout.
- Topics: 17
- Replies: 36
- ☆☆
is cash discount the only discount included in the discount allowed/received?
and in sales and returns its trade discount only?
thanks
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