Create an Invoice with Discount for Accounting Effortlessly

Invoice with discount for Accounting

hi guys on topic nothing today is trade discounts and cash discounts trade discounts mark down from the lease price to encourage buyers to purchase so so let's have an example in here rosi company sold goods amounting to 5000 at a 10 trade discount so goes amounting to five thousand billion and 10 percent discount c buyer so how are we going to compute see this price now 5 000 deduct the trade discount which is 5 000 multiplied by 10 so that is 500 so on invoice price nalang i four thousand five hundred so yandang yung record now ten see four thousand five hundred okay this is how you record and debit mo will be cash which is 4500 and then credit of sales 4500. sold goods on cash so as you see here even though on price list is five thousand cash discount sorry non trade discount na ten percent hindi national okay let's have another example rosi bookstore quoted the price list of 250 pesos for each 12 books less a trade discount of 20 percent so cerrosi bookstore dao ankada so how are we going to compute that and this price is 250 pesos multiplied by 12 pieces so that is 3 000 pesos then the dock the trade discount which is 3 000 multiplied by 20 percent so that is 600 now an invoice price 2 400 again it is disregard the 3000 and the 600 so if we're going to record this one the journal entry will be debit cash of 2400 and credit sales of 2400 then we can have an explanation of sold goods on cash even though three thousand dapat dina pinakita in pinakita invoice price okay let's have another example having series of trade discounts so what it means is hindi long island chennai began and discounts so it could be two or more rosi bookstore quoted a price list of 250 pesos for each 12 books less a series of trade discounts of 20 and 10 so the same on 12 books 250 pesos but this time around there are two trade discounts it is 20 then after deducting the 20 percent the doc again additional trade discount of 10 percent so atom computation this price again 250 pesos multiplied by 12 pieces so that is 3 000. then less the first trade discount which is 3 000 multiplied by 20 so that is 600 so now the balance will be 2 400. now let's apply the 10 additional trade discount so again deduct the ten percent but this time around ibaba was balanced which is 2 400. so that would be 240 and 10 and 2400 i 240 now on invoice price nothing is 2160 okay series of trade discounts multiplying invoice price okay with trade discount no need for you to uh record the trade discount transactions okay to journalize that or to record the transaction our debit is cash which is 2160 and then credit sales two thousand one hundred sixty our explanation by the name sold goods on cash again reminder them put the things at rate discounts whether single discount or series of trade discounts no need na a record you discounted price just the invoice price now let's discuss cash discounts discounts given by the company to encourage prompt payments also it is recorded separately in the book of accounts so it picks a b hand this time around shikash discount designated by the new show notation as to which means that the buyer may avail 2 percent discount if the invoice is paid within 10 days guys this may vary [Music] discount cash discounts are called purchase discounts from the buyer's viewpoint and sales discount from the seller's viewpoint so sales discount okay let's have an example here on june 5 2018 samsung company sold goods with an invoice price of 25 000 term 210 net 30 the invoice price was paid on june 12 of 2018 so explaining days to pay with ian uh until 30 days long with the full amount the net amount invoice june 12th of 2018. from june 5 to june 8th june 12 so 1 two three four five six seven seven days seven days pasa ten days now available how are we going to compute so the invoice price is 25 000. just deduct the cash discount so 25 000 multiplied by two percent that is 500 then your net cash received is 24 500. okay so how are we going to record that since guys the lawyom date dito june 5 2018 june 12 2018 at both date night what we're going to debit is accounts receivable 25 000 and then credit sales of 25 000. our explanation is sold goods on account so as you see here on june 5 accounts receivable in the explanation it emphasizes then we will have another recording on june 12 which is debit cash of 24500 and then the sales discount of 500 and then the accounts receivable of creditna 25 000 our explanation is collection on june 5 sale discount taken so bhagda tingnaman says june 12 500 that's why the debit iona sales discount na 500 and then say accounts receivable okay let's have another example on march 23 2020 levy company sold merchandise with 320 list price trade discount 30 percent credit term 1 15 net 30 so this time around pin exam account see three discount achakasi cash discount now march 23 down celebi company nakabantanang merchandise amounting to 320 000. first on trade discount i 30 percent and then a karo on panna the invoice was paid on april 5. so nabayaran merchandise on april 5. from march 23 to april 5 13 days so see 13 days pasa 15 days one percent okay so for us to compute that and this price is three hundred twenty thousand ibaba was a trade discount so three hundred twenty thousand multiplied by thirty percent so that is 96 000. then our balance will be 224 thousand and then cash discounts or the sales discount sales discount of one percent will be multiplied on the balance which is 224 thousand so that is 2240 in the is balanced 224 thousand so now a net cash receive is 221 760. so [Music] so the first one is the march 23 so for march 23 a record donate so debit accounts receivable 224 000 credit sales 224 000 and then explained by sold goods on account then let's record april 5. so for april 5 2020 debit cash of 221760 debit sales discounts of 2240 000 and then credit of accounts receivable 224 thousand collection on march 23 sale sale discounts taken march 23 even though um this price telegraph 320 since in appliances trade discount hindi na pinakita yo naiba was the 30 outright young discounted price nasha and 2249 sales discount then paramasiro muse accounts receivable full amount okay so again let's have another example on march 23 2020 levy companies sold merchandise with 320 this price trade discount of thirty percent and credit term of one is to one fifteenth and net thirty so same the levy company than three hundred twenty thousand my trade discount 30 percent at my credit terminal 115 net 30. the invoice was paid on april 10 2020. so combination from march 23 to april 10 2020 18 days so see 18 days 15 days one percent discount paganito so for your situation like this your computation will be this price of three hundred twenty thousand less the trade discount of thirty percent so thirty percent multiplied by three hundred twenty that is ninety six so the net cash receive will be 224 000 that's it there's no other additional deduction for cash discount so if we're going to record that again so that means so for march 23 debit accounts receivable of 224 000 and then credit sales of 224 thousand explanations sold goods even though 320 thousand on this price only record long nathan i 224. discount at april 10 2020 we will have another transaction but this time around debit cash of 224 000 and credit accounts receivable of 224 thousand our explanation will be collection on march 23 sale that's it yeah so that would be all thank you please like and subscribe bye