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• # 71206
• Sun 22 May 2011 02:28 PM

Hi every1,

Just a quick question..

If for example one is asked to produce an Invoice and a Credit Note and lets say dated 25th June, which has a Cash Discount (payment terms to be met within 7 days for the discount to apply). And was required to produce a Statement of Account dated 30th June (to be sent at the end of the month)

Would the Statement of Account have both calculations of WITH discounts & WITHOUT discounts, or would we be assuming only WITH discount applied (due to the Statment of Account being issued within the 7 day period) ?

For some reason my hunch tells me to have both.. Since no payments been recieved between the Invoice & Credit Note being issued up to the production of a Statement of Account and being issued; stating with and without a discount if terms are/not met..


Many Thanks :-)


Edited at 22 May 2011 07:14 PM GMT

Edited at 22 May 2011 07:18 PM GMT

Edited at 22 May 2011 07:19 PM GMT

Edited at 22 May 2011 09:06 PM GMT

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• # 71217
• Mon 23 May 2011 10:04 AM

Hi Sandeep,

I don't know the answer, but what I would do is write the statement with the full prices and write underneath the statement

Terms: cash discount of x% if goods are paid for within 7 days of original order

Anyone else have any thoughts on this?

I don't want to tell you the wrong thing, and I am not an expert by any means, but this is what I would do!

Cheryl

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• # 74025
• Fri 02 Sep 2011 05:03 PM

Hi there,

In my experience you would only record the original amounts and the discount would be taken care of on recording the Receipt for the invoice (minus the credit note):

eg:  Debit Customer account with total Gross (no discount) for the invoice and Credit Customer account with total gross (no discount) for the Credit note

then when you receive payment for the outstanding balance, where the customer takes the offered discount, you would Credit the customer account with the Gross amount still outstanding but also Debit your discounts given account with the value of the discount taken by the customer at the point of payment.

Technically the full amount remains outstanding until the Customer actually pays the invoice and, if within terms, takes advantage of your offered discount.

Hope this helps.

Caroline Barbour (HND ACCS., PQ ACCA, MICB (Comp))

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• # 74026
• Fri 02 Sep 2011 05:08 PM

Ooops, sorry forgot to say that your statement at the end of the month would show the discounted amounts if the customer took advantage of them but would show the Un-discounted amounts if the customer had not taken advantage of the offered discount.  

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