أنشئ حسابًا أو سجّل الدخول للانضمام إلى مجتمعك المهني.
IF it is a discount allowed then
P/L Account DR
Party Account DR
IF it is a discount received then
Party Account Dr
P/L Account Cr
Trade discount is basically sales discount and it shows on sales invoice.
Entry
Accounts Receivable 950
Trade Discount 50
Sales 1000
Trade Discount is the discount provided on bulk purchases and generally trade discount is not shown in the books of accounts the entry for purchase of10,0005% trade discount is Purchase A/c....Dr9500To Sundry Debtor/cash/bank A/c.9500
Absolutely it is caused at the time of sale of goods.
Journal Entry is followed
Discount on Sales...........Dr
To Sundry Debtor
The seller would not record a trade discount in the accounting records. Instead, it would only record revenue in the amount invoiced to the customer. If the seller were to record the retail price as well as a trade discount on an invoice to a reseller, this would create an unusually high gross sales amount in the income statement that might mislead any readers of the financial statements into thinking that the manufacturer has higher sales volume than is really the case (despite the presence of a large sales deduction for the trade discount). Thanks to all of Participate / Friends