Discounts allowed - accounts, Accounting Basics

Explain Discounts allowed.

 

Posted Date: 2/12/2013 5:14:21 AM | Location : United States





When a business offers a credit customer a discount for early settlement, the discount granted is a discount allowed. The consequence of a discount allowed results in the business receiving a reduced amount for a sale. Although the sales revenue is reduced, a discount allowed is never charged to the trading account. Discounts allowed are always charged as a separate expense to the profit and loss account.

Posted by Jermy | Posted Date: 2/12/2013 5:17:00 AM


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