Hi, Please guide me treatment for Discount received on Purchase Invoice and Discount paid on Sales Invoice

What I need is accounting treatment for these two Account Heads Discounts on Purchase and Discounts on sales


Discount on purchases

depends, if the discount is an ordering dicount, like a qty discount, then you enter what you actually paid, the discount is not entered separate

if the discount is an early payment discount, like for terms of 2/10/net 30, then you create a credit memo for the  supplier, use an other income account, enter the amount. then in pay bills select the bill , apply the credit and pay the balance due

sales discount, posts to an income account called, sales income discount.  It acts as a contra account lowering gross sales

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