Discounts Flashcards
1
Q
what are trade discounts
A
discounts received from a supplier with whom you have a good trading relationship
2
Q
are trade discounts given before or after VAT is calculated
A
before
3
Q
what is a settlement discount
A
discounts relating to situations where payments are paid promptly
eg you do not take the full amount of credit time given by supplier
4
Q
where are discounts received recorded
A
trade payables account
5
Q
where are discounts allowed recorded
A
trade receivables,
6
Q
in the discounts received account, on what side are entries
A
credit, offset against purchase
7
Q
in the discounts allowed account, on what side are entries
A
debit
offset against sales
