# discounts received entry in Accounting?



## ross81 (6 Sep 2012)

Not sure if this is the right forum for this basic question but I've just started studying Accounting and cant get my head around the double-entry for discounts received & discounts allowable. Say Jones gives my business a cash discount of €100. Now the double entry affects the accounts of Jones and disc received, but why is disc received credited and Jones debited? Has the money not been given by Jones (credit) and received by disc received (debit)?


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## callybags (6 Sep 2012)

Discount received would be a cash discount given to you by one of your suppliers.

Say you owe Jones €1,000 for goods supplied.
Jones says "We'll settle for €900"

The entry in your books will be:

Dr  Creditors A/C         €1,000         (to clear the debt)
Cr  Bank A/C                         €900 (Being the payment made)
Cr  Discount Received             €100

Hope this is clear.

Discount given (by you to your custoner) is treated the same, except the entries are reversed.


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## Brendan Burgess (6 Sep 2012)

We don't deal with academic questions on askaboutmoney.

However, I will leave this in place as callybags has given such a comprehensive answer.

further academic questions will be deleted


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