Discount is not recorded in the books of accounts

Asked by admin @ 11/08/2021 in Accountancy viewed by 440 People

Which discount is not recorded in the books of accounts?

Answered by admin @ 11/08/2021

Trade discount is not recorded in the books of accounts because the two parties involved in the negotiations decide the discount on conditions(sometimes even without it) like “if you pay in so and so time you’ll get 10% off” or “if you buy this much quantity of goods, you’ll get this much of discount”, etc. This discount is different from cash discount because cash discount is recorded in the books of accounts and this discount is like a on the spot sort of thing. We directly deduct the amount of discount from the total discount and record the transaction. We only mention this discount in the narration like”(Being so and so goods purchased and trade discount of X% provided)”.

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Discount is not recorded in the books of accounts

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