Cost of Goods Sold vs. Sales account for discounts

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Subject Author Date Cost of Goods Sold vs. Sales account for discounts Ace 10-16-2007  Re: Cost of Goods Sold vs. Sales account for disco... Allan Martin 10-16-2007  Re: Cost of Goods Sold vs. Sales account for disco... Ace 10-16-2007  Re: Cost of Goods Sold vs. Sales account for disco... Laura 10-16-2007  Re: Cost of Goods Sold vs. Sales account for disco... Ace 10-16-2007  Re: Cost of Goods Sold vs. Sales account for disco... Allan Martin 10-16-2007
Posted by Ace on October 16, 2007, 2:19 pm Please log in for more thread options I sell a product from a supplier and they allow a discount to certain retailers. They, in turn, reimburse me for this discount. I don't know whether to use a Sales account or Cost of Goods Sold account to record it. If it's entered into a sales account, does this subtract from the total sales? Or is it better to record it as an expense (cost of goods)? Which is the correct method? Posted by Allan Martin on October 16, 2007, 2:47 pm Please log in for more thread options >I sell a product from a supplier and they allow a discount to certain >retailers. They, in turn, reimburse me for this discount. I don't know >whether to use a Sales account or Cost of Goods Sold account to record it. >If it's entered into a sales account, does this subtract from the total >sales? Or is it better to record it as an expense (cost of goods)? Which is >the correct method? Give us a time line for the events that occur. > Posted by Ace on October 16, 2007, 4:24 pm Please log in for more thread options I receive items and insert into inventory with bill. I sell to retailers and when invoicing, deduct the discount allowed. After receiving payment (net 30) I pay the vendor whatever cash received. I only pay after receiving payment for the merchandise. " > > > Give us a time line for the events that occur. >> > Posted by Laura on October 16, 2007, 5:59 pm Please log in for more thread options If you give your customers a discount post it to Sales Discount. If Vendors give you a discount post it to Purchases Discount (COGS). In this case it sounds like the discounts are equal. Keep it simple and show who is giving/getting the discount. >I receive items and insert into inventory with bill. I sell to retailers >and when invoicing, deduct the discount allowed. After receiving payment >(net 30) I pay the vendor whatever cash received. I only pay after >receiving payment for the merchandise. > > " > >> >> Give us a time line for the events that occur. >>> >> > Posted by Ace on October 16, 2007, 11:34 pm Please log in for more thread options Thank you, Laura. > If you give your customers a discount post it to Sales Discount. > > If Vendors give you a discount post it to Purchases Discount (COGS). > > In this case it sounds like the discounts are equal. Keep it simple and > show who is giving/getting the discount. > >>I receive items and insert into inventory with bill. I sell to retailers >>and when invoicing, deduct the discount allowed. After receiving payment >>(net 30) I pay the vendor whatever cash received. I only pay after >>receiving payment for the merchandise. >> >> " > >>> >>> Give us a time line for the events that occur. >>>> >>> >> > Similar Threads Posted Cost of Goods Sold question April 13, 2008, 5:48 pm Cost of Goods Sold not posting after a certain date? August 29, 2006, 12:59 am Cost of Goods Input Accounts Payable Output July 18, 2007, 5:25 pm How to link time and cost to sales order September 23, 2009, 9:38 am Cost accounting - current standard cost verses average standard cost August 6, 2009, 5:34 pm need to fix up sales tax account in 2005 Pro March 5, 2007, 3:07 pm Are gross sales taken from Income Tax Summary report or Sales Tax Liability report when filling in State Sales Tax Forms Gross Sales Field? March 3, 2009, 10:28 am Discounts increase total income??? November 15, 2007, 4:22 pm Problem with Discounts after importing data. July 24, 2008, 2:09 pm Discounts and Credits -- NOT intuitive and NOT correct August 19, 2008, 9:21 am