How to calculate discount on debtors?

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Solution

In case of Provision for discount on debtors, one must remember that discount is not allowed on debts that become bad (t he amount that becomes irrecoverable from the debtors is known as bad debts ). Therefore, Provision for discount on debtors is made for good debts only. In other words, Provision for discount on debtors is calculated on Sundry Debtors after deducting bad debts and the provision for doubtful debts.

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Similar questions

What is meant by provision for discount on debtors?

Debtors: Rs. 30,000. Bad debts: Rs. 300, provision for bad debt 5% on debtors, discount on debtors 2%.
Calculate the correct amount of provision for discount on debtors.

Q. D's Trial Balance contains the following information: Discount allowed Rs. 500, Provisions for discount on debtors Rs. 1,100. It is desired to make a provision for discount on debtors of Rs. 1,800 at the end of the year. The amount to be debited to the Profit & Loss Account is:

Q. Discount given to debtors is known as _____.

Q. The Provision for discount on debtors is calculated _______________________.

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