Ledger Question: Download Ledger PDF
Tell me should the Cash Discounts GL hit the Balance Sheet as per US accounting concept? If yes, then why and if No, then why?
Answer:
I believe that cash discounts are taken into P&L and not to the B/S.
The journal would be :
Dr. Bank A/c 90
Dr. Cash Discount given A/c 10
Cr. S. Drs 100
So it is taken into P&L and adjusted in the Net profit itself..
Hence, you add the Net profit with your capital in B/S.
So, net effect is given there.
The journal would be :
Dr. Bank A/c 90
Dr. Cash Discount given A/c 10
Cr. S. Drs 100
So it is taken into P&L and adjusted in the Net profit itself..
Hence, you add the Net profit with your capital in B/S.
So, net effect is given there.
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