02-16-2010, 12:37 AM
ok first JazakALLAH for your intensions, and i still have doubts regarding journal entries lets not break the chain, first entry for sales as far i been through trade discount is not included for accounting purpose or even for sales tax? and same is for cash discount which companies offer for prompt payment. now total sales amount will be at normal price
50 @10 = 500
-trade discount 5
-cash discount 5
amount for tax 490 and further output tax is 78.4
now issue is wether company to whom cash discount is offered avail this or not sales tax will be charged in above manner and journal entry will be
debit A.R (495+78.4) 573.4
credit sales 495
credit output tax 78.4
as cash discount is not yet been taken and is not sure it will be or not, is't it been allowed that if allowing discount is normal practice of business and amount of discount is quite reasonable than it can go through above entries/procedure? please correct me
seond step for purchase return
debit sales return 20 2 @10
debit output tax 3.2
credit A.R 23.2
if discount is been availed cash discount 1%
debit cash 544.698
debit sales discount 5.502
credit A.R 550.2
please do correct me if i m wrong with these entries. jazakALLAH,
bad debts releif i asked can i claim it or?
50 @10 = 500
-trade discount 5
-cash discount 5
amount for tax 490 and further output tax is 78.4
now issue is wether company to whom cash discount is offered avail this or not sales tax will be charged in above manner and journal entry will be
debit A.R (495+78.4) 573.4
credit sales 495
credit output tax 78.4
as cash discount is not yet been taken and is not sure it will be or not, is't it been allowed that if allowing discount is normal practice of business and amount of discount is quite reasonable than it can go through above entries/procedure? please correct me
seond step for purchase return
debit sales return 20 2 @10
debit output tax 3.2
credit A.R 23.2
if discount is been availed cash discount 1%
debit cash 544.698
debit sales discount 5.502
credit A.R 550.2
please do correct me if i m wrong with these entries. jazakALLAH,
bad debts releif i asked can i claim it or?