Kaushik

• Oct 2nd, 2005

 

Discount refers to the payment terms or on quantity(bulk oreder discount)oredered.In the invoice received from supplier,discounts term is sepcificaly stated.E.G. If paid with in 15 days discount @ 2%,what you need to do is pay 2% less then the original invoice amount,however caution should be taken that the freight amount should not be considered while calculating the discount.Adjusment could be for various reasons.Over priced invoice,short delivery of quantity as per goods received note,poor quality etc.Agreed upon amount will be deducted from the invice, while making the payments.

tgs100

 Profile Answers by tgs100 

• Dec 12th, 2005

 

In AR, discount is given to promote the business and cash flow. Adjustments are made to adjust the account balances, not possible in other means.