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Sales Tax Invoice Entry
04-22-2011, 04:09 PM
Post: #1
Sales Tax Invoice Entry
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.
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04-22-2011, 05:41 PM
Post: #2
 
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
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04-22-2011, 05:58 PM
Post: #3
 
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.
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04-22-2011, 06:10 PM
Post: #4
 
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
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04-23-2011, 02:41 PM
Post: #5
 
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.
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04-23-2011, 03:40 PM
Post: #6
 
Cash Discount scenerio

A/R 1070
Sales Dic 100
Sale 1000
Out put tax 170

assume Sales price 1000 is ex sales tax
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04-23-2011, 08:18 PM
Post: #7
 
Is Total Dr. is Equal to Total Cr. ???
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04-23-2011, 08:39 PM
Post: #8
 
yes debit 1170 and credit 1170
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04-23-2011, 09:12 PM
Post: #9
 
Thaaks Sir Information Consultant.
So nice of You.
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