NBS accounting students

[milorinodino]

help needed

question 1:
table cost 50
table selling price 500
discount 10% (aka 50)

how would you take in the double entry of discount?

dr cash 450
cr discount allowed 50?


question 2:
table cost 50
table selling price 500
free of charge

how would you take in the double entry of complimentary table?

TIA!!

 

[Fallenangelz]

help needed

question 1:
table cost 50
table selling price 500
discount 10% (aka 50)

how would you take in the double entry of discount?

dr cash 450
cr discount allowed 50?


question 2:
table cost 50
table selling price 500
free of charge

how would you take in the double entry of complimentary table?

TIA!!

dr cash 450
dr sales discount 50 (contra sales account)
cr sales 500

dr cogs
cr inventory

part 2.

dr cash 500
cr sales 500

dr cogs 50+ foc table
cr inventory 50+ foc table

 

[triface]

part 2.

dr cash 500
cr sales 500

dr cogs 50+ foc table
cr inventory 50+ foc table

May be missing something, but if it's complimentary, there shouldn't be any movements in cash, no? I would write off the entire debit side to discount allowed or marketing expenses.

@TS Do note that discount allowed is on the debit side because it is an expense. Only in very specific circumstances would you see the expense on the credit side (correcting journal entries, etc.).