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Sales Discount is a  Contra Revenue Account    for the business because it reduces the Revenues   of the business, but, in fact, increases revenues  ( Sales )  later on because it generates huge Sales if successfully worked. But it is offered to customers in the forms of Promo Codes, Discount Coupon Code, Special Discount Offers to influence the customers to buy the goods at the cheapest prices and ultimately, sales will be increases that enhance the Net Income / Net Profit at the end. I n Accou nti ng, Sales Discou nt mea ns the co ncessio n give n by the seller to the buyer o n selli ng price, if the buyer makes payme nt before due date. But, it ca n also be give n whe n the seller offers differe nt packages for goods a nd services to buyers.   The seller ca n give Sales Discou nt to buyer due to Old customer or it is the policy of compa ny to offer Sales Discou nt to Customer at 50% Off or whatever promotio n, they wa nt ...

Here we discuss Inventory Definition and What is Inventory in Accounting. Inventory includes those goods which are held by the business for resale purposes. The inventory is convertible into cash very quickly and it is done within the operating cycle of the business. In British Accounting System, we called Inventory as Stock. Last Accounting Period Balance of Inventory is Opening Inventory of the current accounting period and current’s year ending Inventory is the beginning of the next accounting period and so on. Inventory is always measured on Cost or NRV whichever is less. Here NRV is Net Realizable Value that includes all costs incurred in bringing the goods in saleable position. It is calculates as: NRV = Sales - All Costs Incurred in bringing the goods in saleable position Closing Inventory is shown in the Income Statement and Balance Sheet while Opening Inventory is shown only in Income Statement.

In the previous articles, we discuss about Perpetual Inventory System and Periodic Inventory System , but here we discuss the difference between them. In Perpetual Inventory System, we regularly update the value of inventory when inventory are sold, while in periodic inventory system, we don’t adjust the value of inventory when inventory are sold. Instead, we adjust the value at the end of operating cycle or accounting period of the business of Entrepreneur. Perpetual Inventory System is based on Computerized Accounting System which is integrated in larger-scale businesses. But, Periodic Inventory System is mostly adopted by small-scale businesses. You may also be interested in Quickbooks Free Trial Download that is the most advanced Computerized Accounting Software. Perpetual Inventory System requires expensive tools to operate within the larger companies because this system demands constant updates of inventory through automatic computerized system in a ...

Firstly, we are interested to know “what is Periodic Inventory System”. Basically, it is a system in which value of inventory are not updated daily rather than it is recorded at the end of Accounting Period. You may also be interested in Perpetual Inventory System Journal Entries . We record Following Business Transactions related to Under Periodic Inventory System: Purchase of Merchandise Suppose an Entrepreneur purchases 10 pieces of clothes on Credit from his / her supplier or Accounts Payable during the current accounting period 2016. The rate of these clothes are Rs.1000. We record the following Journal Entry at the end of Accounting Period: Purchases a/c 10000                  Accounts Payable a/c 10000 Purchased 10 Pieces of Clothes at the rate of Rs.1000 From Accounts Payable Sales of Merchandise Now the entrepreneur sold on credit, the 5 pieces of ...

Firstly, we must know about what is perpetual Inventory system? It is a system in which all Business Transactions related to value of inventory are updated on daily and regularly basis at once when these occur in working business time. All Purchases of Merchandise, sales, closing Inventory are regularly updated. Following Inventory Journal Entries are passed under Perpetual Inventory System: Purchase of Clothes When an Entrepreneur doing retail business of cloths purchases 10 pieces of Clothes on credit from his / her supplier or Accounts Payable for Rs.1000, then he / she records the following Journal Entry in his / her Inventory Journal: Inventory a/c  10000                      Accounts Payable a/c 10000 (10 Pieces of Clothes Purchased at the rate of Rs.1000 from Accounts Payable) Sales of Clothes Suppose, three cloths are sold on c...

Here are Best 10 accounting interview questions which may be asked while you are giving accounting job interview. You need to just clear your concepts about these Accounting Questions. 1. Why Do You want to joint Accounting Profession? The probable answer may be that you can say “It is your passion. You want to utilize your knowledge to become experts in the field of Accounting ”. 2. Do You Possess Any Knowledge of Accounting Standards? Accounting Standards are those standards which are adopted by an Accountant while preparing financial statements of the business. International Accounting Standards (IAS) which are now changed to International Financial Reporting Standards (IFRS) are issued by International Accounting Standard Boards (IASB) which was made previously by International Accounting Standards Committee (IASC).   3. Do you have Proper knowledge of using various accounting applications for Bookkeeping And Accounting? Yes, I can use Mic...