Can any1 tell me where to record discount allowed in Trading and P&L a/c and Balance Sheet ??
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Discount Allowed A/c is recorded in profit & loss A/c. (Debit side), Whereas, Discount Received is recorded same in profit & loss A/c. But in (Credit side).
Discount is a Part of P/L A/c. As, It comes under Indirect Expenses. So, It will only recorded in P/L A/c. In Trading and Balance-sheet it will not recorded.
Trading records only Factory or manufacturing related expenses, such as: Wages, Carriage,Freight,Octroi, Custom duty, Sales,purchases,etc.In other words, all expenses which relate to either purchase of raw materials or manufacturing of goods are recorded in the trading Account. Such expenses are called ‛Direct Expenses’.Whereas; profit or loss A/c. records Office or business related expenses. Such as: Discount, Office Rent, Taxes, Salaries, postage, commission, Advertisement etc. These are called ‛Indirect Expenses’.and Balance-sheet records only Assets & Liabilities of a business firm. It is prepared to ascertain the true financial position of the business at a particular point of time. Liabilities include, Bank loan, sundry-creditors,bills payable, capital etc. Assets include, Machinery, plant, building, furniture, Bills receivable, etc.
Hope it's helpful to you! :)
Discount is a Part of P/L A/c. As, It comes under Indirect Expenses. So, It will only recorded in P/L A/c. In Trading and Balance-sheet it will not recorded.
Trading records only Factory or manufacturing related expenses, such as: Wages, Carriage,Freight,Octroi, Custom duty, Sales,purchases,etc.In other words, all expenses which relate to either purchase of raw materials or manufacturing of goods are recorded in the trading Account. Such expenses are called ‛Direct Expenses’.Whereas; profit or loss A/c. records Office or business related expenses. Such as: Discount, Office Rent, Taxes, Salaries, postage, commission, Advertisement etc. These are called ‛Indirect Expenses’.and Balance-sheet records only Assets & Liabilities of a business firm. It is prepared to ascertain the true financial position of the business at a particular point of time. Liabilities include, Bank loan, sundry-creditors,bills payable, capital etc. Assets include, Machinery, plant, building, furniture, Bills receivable, etc.
Hope it's helpful to you! :)
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