My understanding of these two accounts are:

Discount allowed is affected when the company offers a discount to a customer and it is netted against sales... thus listed in the chart of accounts as an income account.

Discount received is affected when a vendor offers a discount on purchases and it is netted against purchases... soooo in the chart of accounts this account would be what type of account - possibly expense?

Thanks in advance...

Discounts allowed is an expense and discount received is income.

Since this is a real company, you can call them anything you like. I don't know where you are at, but I've never referred to them by those names.

"Discounts allowed" could theoretically be either of them cause it's not specifying who's allowing the discount to whom. You could use that name for both.

I have issue with the title "discounts received." Um... if I just saw that title I would assume it's the discounts you've received off your bill as a purchaser. (In other words, what you said.) I absolutely do not see that as income. First, you haven't even really "received" anything. You're just not paying as much. Not paying as much reduces your cost in something and is not by any definition of the word an "income."

I'd say your original answers are correct. But again, since it's a real company, you can basically call the accounts what you choose. I call them sales discounts and purchases discounts - pretty clear. And the sales discounts is a contra revenue and the purchases discounts are contra expense. (Contra going against a balance.)

Does this mean you're using a periodic inventory method?

I understand why discount receive is an income. Why does it appear on the credit side of the three column cash book and not the debit side?

To sell goods at a lower price, to maintain relationships with customers

But why are we saying it as income or expense when we did not receive or pay anything even nothing come into our account just a fictitious transaction is done.

Name three controls over petty cash

Is discount received vatable or not

The same question I keep asking myself all the time.y isn't it on the derbit side and allowed the other side...

A sales discount will be a debit becoause it offsets Sales. A purchase discount will be a credit because it offsets purchases.

Discount allowed is a deduction against sales in a trading account, discount received is other income

Well that's great! My accounts list has Discounts Given as a Cost of Sales and Discounts Taken as an expense. Obviously I need to change it but what do I do?

Terminology;

Discounts received are a reduction of a purchase cost accounted for separately as such they are a credit balance
Discounts allowed or given is as we have both said accounted for in the trading account
Discounts taken would in the ordinary meaning be a discount received as in a settlement discount