Discount allowed is a kind of deduction from A) Account payable B) Account receivable C) Cash account D) Discount account?

B - Deduction from accounts receivable

Hello Team,

A discount allowed is when the seller of goods or services grants a payment discount to a buyer. This discount is frequently an early payment discount on credit sales, but it can also be for other reasons, such as a discount for paying cash up front, or for buying in high volume, or for buying during a promotion period when goods or services are offered at a reduced price. It may also apply to discounted purchases of specific goods that the seller is trying to eliminate from stock, perhaps to make way for new models.

Regards,

 

Saiyid

Since we reduce the discount in the bill on a regular purchase so it will fall in discount account

Yes basically you will get less amount of account receive able after netting discount to increase the debtor turnover ratio

Discount Allowed is the discount given to the debtor upon sale or subsequent recovery to boost sales or hasten recovery process respectively. Discount Allowed can be recorded separately or netted depending on the rules governing the entity. So, Discount Allowed can be considered as deduction to Account Receivables.