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    softdev_sup's Avatar
    softdev_sup Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 30, 2012, 04:50 AM
    Cost of Good Sold Postings Debit Side
    Thanks in advance
    I have a line Item with Average cost of 5, I sold 5 items at Selling Price of 10 with 10 discount , so its like ( 5 * 10 = 50 - 10(Disc) = 40).

    My Question is Regarding Cost of Good Sold Postings , It should be
    5 * 5 = 25 or
    5 * 5 = 25 - 10 (Disc)
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    May 30, 2012, 10:16 AM
    The discount will not affect Cost of Goods Sold. It will however affect your sales.

    You will have your Gross Sales and the discount will reduce your gross sales.

    Your COGS will be the 5 items sold times the 5 cost.

    Your Sales will be 5 items sold at the 10 selling price.

    Your Discount will be 10.

    Remember, when you are dealing wit a sale you will have 2 sets of journal entries; one for the actual sale and one for the cost of the sale.
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