| A LTD | |
| Purchase | 70000 |
| (700 KG*100) | |
| + VAT 5% | 3500 |
| 73500 | |
Suppose Company received a Credit Note for Turnover Discount as follows
| A LTD | |
| Turnover discount | 8500 |
| + VAT 5% | 425 |
| 8925 | |
Pass entry for Purchase ,payment and Discount received
Will we issue Debit Note or Credit Note
View answer
ENTRY FOR Purchase
PUR 5% LOCAL DR 70000
INPUT VAT 5% DR 3500
TO A LTD 73500
DISCOUNT COMPUTATION
DISCOUNT 8500.0
+ VAT 5% 425.0
TOTAL 8925.0
ENTRY
A LTD DR 8925
TO Discount Received 8500.0
To Input Vat 5% 425.0
Even though Credit Note is received,it is a debit note for us as party is debited
(Note One Party Credit Note is Debit Note for Other Party)