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a provision is set up to give discounts to debtors who settle accounts early. as the company are not receiving the full debt they have a provision in place in this eventuality. This is seen as an expense to the business and brings the amount the debtors down. In other words dr P&L and Cr debtors in balance sheet
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
Discount allowed is debit
Debit cash / bankCredit discount allowed
Debtors a/c Dr. Discount expense a/c Dr. To Sales a/c
a provision is set up to give discounts to debtors who settle accounts early. as the company are not receiving the full debt they have a provision in place in this eventuality. This is seen as an expense to the business and brings the amount the debtors down. In other words dr P&L and Cr debtors in balance sheet
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
Discount allowed is debit
Debit cash / bankCredit discount allowed
provision for discount received
trade discount is for trade customer (who has an account with the supplier) discount allowed is for walk in customers (no account holders)
Debtors a/c Dr. Discount expense a/c Dr. To Sales a/c
Sundry Debtors always have Debit balance, if it is showing credit balance ie, Advance paid by Sundry debtors or your customers, if you are given discount after making the invoice, or excess payment done by your customers then the Sundry Debtors balance will be Credit. Regards, Ajish
Discount allowed is that amount which is given by our company to others while discount received is that amount which is received by our company from others.while discount allowedDebit discount allowedCredit cashwhile discount receivedDebit cashCredit discount received
for the class of debtors, inflation advantageous as they area allowed to pay its debts with money of its purchasing power is lower than when they borrow
1 billion equable whats?
no because the discount allowed and discount received are totally diffrent and has no link with each other where as if credit note is not issued than it cant received even