The term "discount" can refer to both "discount received" and "discount allowed," depending on the context. "Discount received" typically refers to a reduction in price that a buyer gets from a seller, while "discount allowed" refers to the reduction that a seller offers to a buyer. To clarify which meaning is intended, it's essential to consider the context in which the term is used.
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 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
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
does discount allowed and discount received go into the income statement or balance sheet?
Discount allowed: original entry made in the discount allowed column on the debit side of the cash book and at the end of the month debited(after balancing the cash book) in the nominal ledger. The credit entry is made in the personal account of buyer. Discount received: original entry made in the discount received column on the credit side of the cash book and at the end of the month credited(after balancing the cash book) in the nominal ledger. The debit entry is made in the personal account of seller.
provision for discount received
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 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
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
Discount allowed/ received
does discount allowed and discount received go into the income statement or balance sheet?
Trade Discount
Discount allowed: original entry made in the discount allowed column on the debit side of the cash book and at the end of the month debited(after balancing the cash book) in the nominal ledger. The credit entry is made in the personal account of buyer. Discount received: original entry made in the discount received column on the credit side of the cash book and at the end of the month credited(after balancing the cash book) in the nominal ledger. The debit entry is made in the personal account of seller.
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.
Debit cash / bankCredit discount allowed
Discount allowed is debit
trade discount is for trade customer (who has an account with the supplier) discount allowed is for walk in customers (no account holders)