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

Answer

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

Was this answer helpful? Yes No
Original
Rustler - Tips & Tutorials , click to see the site url
AllStar

No answers have been posted

More Actions

People come to QuickBooks Learn & Support for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach:

Qb community
Looking for advice from other business owners?

Visit our QuickBooks Community site.