Which GL account for discounts?


Joined
Aug 9, 2011
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Hi guys,
My software has defaulted a few GL accounts for me but I'm not sure if the discount accounts are correct.

For 'Purchase Discount Account' the default is: '5000 Materials Purchased' under Cost of Goods Sold, but there is another account in the same section: '5201 Discounts Taken'.

Similarly for 'Sales Discount Account' and 'Prompt Payment Discount Account' the defaults are: 4000 Sales undes Sales Revenue, but there is another account in the same section '4009 Discounts Allowed'.

Would the 'discount' accounts be the preferred ones to use or has the software got it right?
 
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Joined
Apr 28, 2011
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To be honest, it doesn't really make that much difference.

You might want to use the 'discount' codes if it was important for you to easily see the level of discounts being given or taken (as opposed to having them mixed in with the normal sales and purchases).
 
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