Difference Between Purchases Discount And Sales Discount
Purchases Discount is a Contra Expense Account which is given to buyers by suppliers of goods while a sales discount is the opposite of Sales Discount which is a Contra Revenue Account which is given by sellers to buyers when they sold goods or services to them. A Purchases Discount is given b y the supplier or ve ndor to t he compa ny on t he purchase of goods while a Sales Discount is given b y the compa ny to its customers to induce t hem to purchase at a discou nted price. Form t he poi nt view of t he b usi ness of t h e company, it is a Sales discount and from t he poi nt view of b uyer’s b usi ness it is a purchases discou nt. Purchases discount is deducted from Total Purchases in order to calculate net purchases while sales discount is deducted from Gross or Total Sales in order to calculate net sales for the period in Income Statement . Purchases Discou nt is a Contra Expense Account w h ic h is deducted fro...