Discount Accruals

Aug 31, 2012
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Hello all! I am preparing for a discount accruals audit of various countries in Western Europe. To give a bit of background, I work for a Consumer Products company. The type of accruals that I am referring to are discounts given for high turnover, prompt payment, seasonal discounts, trade discounts (warehousing, shipping, shelf stocking), discounts related to quantities purchased, employee discounts, coupons, rebates, etc.


1) Which type of discounts would you expect to be included in a discount accrual?
2) What are the journal entries for originally recording the accrual and then eventually reversing the accrual (if discount was given AND if discount was not given in the end)?
3) How do these accruals and their adjustments impact the Balance Sheet and P&L?

Thanks in advance for all of your help!!!!!!


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