How do you record discount received?
Discount received acts as a gain for the business and is shown on the credit side of a profit and loss account. Trade discount is not shown in the main financial statements, however cash discount and other types of discounts are shown in books of accounts.
What type of account is allowance for settlement discount allowed?
The provision for discounts allowable is likely to be a balance sheet account that serves to reduce the asset account Accounts Receivable. The provision accounts counter part (remember double entry accounting) is an income statement account, such as Sales Discounts or Discounts for xxx.
What is the difference between purchase discount and sales discount?
A sales discount refers to reduction in the price of an item or product that a customer buys from a retailer. Getting a purchase discount also encourages the retailers to offer sales discounts to their customers. Purchase Discounts: Individual customers are not the only ones that get discounts.