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dineshreddy344
Jun 17, 2010, 05:03 AM
What is the entry for discount allowed

eelyram
Sep 17, 2010, 02:20 PM
Is the discount allowed to be in the profit and loss statement?

pready
Sep 25, 2010, 11:09 AM
It depends on when the sales discount is taken.

For example if a customer purchases something on credit, then pays within the discount period the journal entry will be:
Debit cash for the amount of cash
Debit Sales discount for the difference
Credit Accounts Receivable for the amount the customer owes

For an example if a customer purchases $100 of goods on credit and there is a discount of $10 if the bill is paid within 15 days, the journal entry will be:
Debit Cash for $90
Debit Sales Discount for $10
Credit Accounts Receivable for $100

On a Multi-Step Income statement Sales discount will be listed after gross sales.

First will be Gross Sales, then Sales discounts and Sales Returns & Allowances will be listed, which will reduce gross sales to get to Net Sales.

jondough
Mar 27, 2011, 11:58 AM
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