Question

Dicount allowed is types of loss or expenses???????​

Answer 1

1. Debit Purchase account and credit cash account.

Rule Applicable: – Debit increase in expense or an asset. Credit decrease in assets.

2. Debit Cash account and credit sales account.

Rule Applicable: – Debit Increase in assets. Credit Decrease in revenue or assets.

3. Debit Expenses account and credit cash/bank account.

Rule Applicable: -Debit Increase in expense. Credit Decrease in assets.

Answer 2

Answer:

Discount allowed acts as an additional expense for the business and it is shown on the debit side of a profit and loss account. Trade discount is not shown in the main financial statements, however, cash discount and other types of discounts are supposed to be recorded in the books of accounts.