A discount is a reduction in the price of goods below the amount at which those goods would normally be sold to other customers of the supplier. Discounts can identified as two parts:
1. Trade Discounts - This is a reduction in the catalogue price of an article, given by a wholesaler or manufacturer to a retailer. It is often given in return for bulk purchase orders.
Accounting
2. Cash or settlement discounts - This is a reduction in the amount payable for the purchase of goods or services in return for payment in cash rather than taking credit.
Trade Discounts
This is a reduction in the cost of goods owing to the nature of the trading transaction. For example a customer might quoted a price 2$ per unit for a particular item, but lower price of say 0.5$ per unit if the item is bought in quantities of say 200 units or more at a time.
In an accounting trade discounts are recorded in only to the day books, its not transfer to journal.
Cash or Settlement Discounts
This is a reduction in the amount payable to the supplier, in return for immediate payment in cash, rather than purchase on credit. For example a suppler might charge 2000$ for goods, but offer a discount of, say 10% if the goods are paid for immediately in cash.
In an accounting trade discounts are recorded in cash book first and transfer it into journal.
Trade discounts received
It should be deducted from the gross cost of purchase. It is recorded as shown below:
o Total creditors (Debit)
o Discounts received (Credit)
o Cash account (Credit)
At the end of the accounting period received account is transfer to the profit and loss account
o Discounts received (Debit)
o Profit and loss account (Credit)
Trade discounts allowed
It should be deducted from the gross sales price. It is recorded as shown below:
o Cash account (Debit)
o Discounts allowed (Debit)
o Total debtors (Credit)
At the end of the accounting period allowed account is transfer to the profit and loss account
o Profit and loss account (Debit)
o Discounts received (Credit)
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A poem I wrote to highlight the difference between Jesus and false religion. In the scriptures Jesus received the most opposition from the most religious people of his day. At it's core Jesus' gospel and the good news of the Cross is in pure opposition to self-righteousness/self-justification. Religion is man centered, Jesus is God-centered. This poem highlights my journey to discover this truth. Religion either ends in pride or despair. Pride because you make a list and can do it and act better than everyone, or despair because you can't do your own list of rules and feel "not good enough" for God. With Jesus though you have humble confident joy because He represents you, you don't represent yourself and His sacrifice is perfect putting us in perfect standing with God! Facebook: www.facebook.com Video Editor email: matthew@robgroup.com Video website: www.cikproductions.com music by Tony Anderson www.soundcloud.com Website: chiselseason.com Ministry Facebook: www.facebook.com Twitter: twitter.com To contact regarding booking, speaking, etc email with "speaking request" in subject line for easier organization : jeffersonbethke@gmail.com download link to word document of poem: www.box.com Wanna start helping and serving Jesus in a practical way? checkout the company of the watch I am wearing in the video! They give 10-25% of all proceeds to non profits and the bands and faces are interchangeable! www.cruxwatches.com
Keywords: jesus, love, religion, bible, christian, grace, mercy, god, spirit, faith, hate, like Gospel Word Holy, bball, 1989
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