Balance Sheet...or P&L?

Mathew_Hill

Hi all

I have another query for all you brains out there!

Discount allowed/received accounts and an inland revenue account...do these go to the Balance Sheet or the Profit and Loss account?

Also I am having troubling remembering which accounts go to the Balance Sheet and which go to P and L....

Can anyone suggest a way of remembering which accounts go where?

Thanks in advance.

Matt

AdamR

Discounts Allowed and Received would go to the profit and loss. I'm not sure what you mean by Inland Revenue account but if it were for PAYE & NI due to HMR&C, it would go to the balance sheet.
If you can distinguish between assets and expenses (both debits) and liabilities and income (both credits), would remembering bALance sheet (Assets & Liabilities) work? Can't think of a method for profit and loss except you don't have profit without income lol!

Hope this helps

MOHMEDSALIM PATEL

Try this might help

If you can distinguish income and expenditure you will be able to work it out which account it should affected .For example say total sales were £6000.00, discount allowed due to early payment is £300.00. Sales is our income because it generate monies for business therefore it is income therefore it must go into P&L credit but by discount allowed business loose £300, it is an expense it must entered P&L debit, While if any transaction does not generate monies or due to any transaction business does not loose any money it must entered in to balancesheet.Be careful with capital expenditure means Buying fixed asstes business loose monies but fixed assets is capital expenditure therfore it must go into Balancesheet.

I am sorry if it is too complicated to understand.