Double Entry Rule or System to account for Discount Allowed and Discount Received
| Earlier article on discount allowed and discount received refers.
Accounting Double Entry for Discount Allowed: Debit : Discount Allowed Account Credit: Debtor’s Account Subsequently, discount allowed will be credited and charged to the Profit & Loss Account/Income statement. Discount Received: Debit: Creditor’s Account Credit: Discount Received Account Subsequently, discount received will be debited and the Profit & loss account/Income statement is credited. Illustration: ABC’s books show the following transactions relating to discounts: Jan 1 Received from Mr. D $20,000 discount allowed by ABC $200 Jan 5 Paid Mr E $30,000, discount received from Mr E $300 ABC closed its book on a monthly basis. Ledgers as follow: DEBTOR- Mr D
DISCOUNT ALLOWED ACCOUNT
CREDITOR- Mr E
DISCOUNT RECEIVED ACCOUNT
|
Related Posts
- Types Of Discounts And Accounting Treatment For Discount Allowed and Discount Received
- Provision For Sales Discount /Discount Allowed
- Errors Affecting The Trial Balance And Suspense A/c (Part 2 of 2)
- Define What Is Discount Allowed And Discount Received .
- Questions(With Answers) On True Or False For Subsidiary Books
Leave a comment