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+--- Thread: Sales Tax Invoice Entry (/showthread.php?tid=9789)
Sales Tax Invoice Entry - Mubashir786 - 04-22-2011
Salam to all,
Plz explain the following entry for sales invoice,
Sale of 20 item of Pesticide Medicine @ 50 each, there is 10% trade Discount,Sales tax rate is 17%, so what will be the actual accounting entry,
Is it right the following entry?
Discount 100 DR.
Cash 900 DR.
Sales 1000 CR.
Sales Tax 170 DR. on Tatal Sales
or
On 1000-100 = 900 x 17% = 153
Plz Explain.
- Information Consultant - 04-22-2011
trade discount ko accounting entry may nahi laitay hain
G Entry
debit credit
A/R ( 20*45) 1053
Sale 900
Output Tax ( 900*17/100) 153
- Mubashir786 - 04-22-2011
Thanks Information Consultant for you kind response,
but why we should record our sales at 900, actual sales is 1000.
it means we are undercasting our sales by 100.
plz clear my confusion.
- Information Consultant - 04-22-2011
sales discount or trade discount may farq hay
cash disount is a reduction inpurchae price in case of prompt payment while trade discount is the reduction granted by supplier from th elist price of goods in case of buying or long term contract
sales dic p& L may charge kartay hain
agar list price 1000 hay or 10 % trade dis mil rha hay to hum sale 900 say book karain gay or agar cash dis mil rha hay to hum sale 1000 say book karain gay or sales discount entry may show karain gay
- Mubashir786 - 04-23-2011
hmm. Thanks sir for ur support,
kindly tell me the complete accounting entries of in both cases i.e. Trade Discount and Cash Discount.
Thanks once again.
- Information Consultant - 04-23-2011
Cash Discount scenerio
A/R 1070
Sales Dic 100
Sale 1000
Out put tax 170
assume Sales price 1000 is ex sales tax
- Mubashir786 - 04-23-2011
Is Total Dr. is Equal to Total Cr. ???
- Information Consultant - 04-23-2011
yes debit 1170 and credit 1170
- Mubashir786 - 04-23-2011
Thaaks Sir Information Consultant.
So nice of You.