yes, because u offer discounts to your customers
Discount allowed for the early settlement of accounts - This discount is allowed to your debtors or customers at the time of the settlement of their account. You may agree with your customers to allow a certain percentage of discount allowed e.g. 2½ % if they settle the full amount on an invoice within 30 days). This discount is recorded when a debtor or customer settles the full invoice within the specified time. This discount needs to be entered as an expense in a Discount Allowed account and will reduce the net profit and will have no effect on the gross profit.This is murali +9199591-22272
You would debit the creditor account and credit the expense it relates to or discounts allowed if you want to show them separately.
contra-expense It's an expense, not a contra expense. If you don't pay the bill within the discount period, and you had recorded the original purchase at net (Purchase price less the early pay discount) then you have more expense, not less, when you don't pay on time.
Sales discount is a reduction of actual sales. It is not an expense rather it is the reduction is selling price which reduces the sales.
discount allowed means the discount which is given by a seller to the buyer. and discount received means the discount received by the seller for purchases made
It is classified as an expense to the trader.
Discount allowed for the early settlement of accounts - This discount is allowed to your debtors or customers at the time of the settlement of their account. You may agree with your customers to allow a certain percentage of discount allowed e.g. 2½ % if they settle the full amount on an invoice within 30 days). This discount is recorded when a debtor or customer settles the full invoice within the specified time. This discount needs to be entered as an expense in a Discount Allowed account and will reduce the net profit and will have no effect on the gross profit.This is murali +9199591-22272
You would debit the creditor account and credit the expense it relates to or discounts allowed if you want to show them separately.
Discount allowed is an expense,take an example if one makes a cash sale and offers a cash discount,it reduces the cash paid and thus accounted for as an expense,a Discount received is treated as a revenue because take an example if one buys goods and pays cash and the person selling grants a discount,it reduces the amount paid and thus an added revenue,the difference on what i paid and what was ought to be paid,its always given in percentage,with set conditions.Types of discounts can be trade or cash both allowed and received.
contra-expense It's an expense, not a contra expense. If you don't pay the bill within the discount period, and you had recorded the original purchase at net (Purchase price less the early pay discount) then you have more expense, not less, when you don't pay on time.
distributon expense is a part of selling expense. its comes under the heading of selling expense. selling expense included various other heads like advertisement expense, distribution expense, packing expense, octroi, sales tax, hidden profit, cost of product etc etc. while distribution expense is the expense occured by the producer of the goods in the form of transportation cost barred by him for making the goods reach the retailers, wholesellers or directly to the godown or factory outlet.
Sales discount is a reduction of actual sales. It is not an expense rather it is the reduction is selling price which reduces the sales.
discount allowed means the discount which is given by a seller to the buyer. and discount received means the discount received by the seller for purchases made
Trade Discount are considered cost of sales/reduction in sales dependant upon who the customer is. Cash Discount is always considered Increasing Interest Expense/Reduction of Interest Expense, dependant upon who the recipient is.
Discount allowed is debit
Debit cash / bankCredit discount allowed
contra-expense It's an expense, not a contra expense. If you don't pay the bill within the discount period, and you had recorded the original purchase at net (Purchase price less the early pay discount) then you have more expense, not less, when you don't pay on time.