It will depend on the amount of sales tax in their jurisdiction and the amount of the discount. If the tax and the discount are the same, it is more beneficial to the purchaser to get the discount. To the Seller, it makes almost no difference!
At 6% tax rate:
On a $100 item -> You pay $100 and store pays $6 tax. Store gets to keep $94.
On a $94 item ($100 with 6% discount)-> You pay $94 and you pay $5.64 tax (total $99.64). Store still gets to keep $94.
There is a slight advantage to the store in that in most jurisdiction there is a tax free amount each month, to cover the cost of the bookkeeping and reporting of taxes, but in a big volume store, that will be a very small percentage of the total amount.
I think the discount comes first and then the sales tax.
Cash discounts are received on cash sales. The seller or provider often refers to the cash discount as a sales discount.
A sales discount account is a contra-revenue account.
Sales discount is shown under income statement as a deduction from sales because it reduces the actual sales figure.
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.
What is the basis of prompt payment discount for sales with trade off invoice discounts? Is it before off invoice discount or after the off invoice discount?
No. It is an online retailer of shoes and apparel. Most of their business, about 80% comes from shoe sales. They are a subsidiary of Amazon.com.
Discount a/c Dr 20 Raman Industries Dr 80 To Sales 100 (Sales book & discount given )
I think the discount comes first and then the sales tax.
Either Retailer Actual Sales Price or Retailer Average Sales Prices
Debit accounts receivableCredit sales revenue
Cash discounts are received on cash sales. The seller or provider often refers to the cash discount as a sales discount.
Explain how it's possible for sales growth to decrease the value of a profitable company.
A sales discount account is a contra-revenue account.
Sales discount is the reduction in price of value of sales to customer for promotional purposes.
Yes, sales discount is the reduction in value of sales that's why shows as deductions from sales revenue.
Sales discount is shown under income statement as a deduction from sales because it reduces the actual sales figure.