What is the balance of discount, credit or debit? (We have to take in account discount received or discount allowed?)
Dear Student
From the basic rule of accounting - We know that Discount account is a nominal account.
Rule of nominal account says that - Debit all expenses and losses and Credit all income and gains.
Therefore from the above rule :
Discount allowed is an expense and hence it shall have debit balance.
Discount received is an income and hence its balance is credit balance.
Regards
From the basic rule of accounting - We know that Discount account is a nominal account.
Rule of nominal account says that - Debit all expenses and losses and Credit all income and gains.
Therefore from the above rule :
Discount allowed is an expense and hence it shall have debit balance.
Discount received is an income and hence its balance is credit balance.
Regards