Income statement Discounts Received

A-Vic

Sorry having a brain block

I know discounts allowed are included in the overheads

But are the discounts received taken from purchases when working out gross profit? (silly i should know this stuff but ive gone blank)

crispy

Hello,

I would show Discounts Received as 'Other Income' eg.

Gross Profit £ xx
Other Income £ xx (ie: Discounts Received, Bank Interest Received)
Overhead Expenses £ (XX)
Net Profit £ xx

A-Vic

crispy wrote: »

Hello,

I would show Discounts Received as 'Other Income' eg.

Gross Profit £ xx
Other Income £ xx (ie: Discounts Received, Bank Interest Received)
Overhead Expenses £ (XX)
Net Profit £ xx

Great thanks Crispy :thumbup1: so would that just be added to gross profit before you work out net profit

crispy

Yes - that sounds good to me.

Only other thing to watch for are 'Returns In/Out'. These would be part of the trading account and should therefore be deducted from Sales / Purchases respectively.

AK002

crispy wrote: »

Hello,

I would show Discounts Received as 'Other Income' eg.

Gross Profit £ xx
Other Income £ xx (ie: Discounts Received, Bank Interest Received)
Overhead Expenses £ (XX)
Net Profit £ xx

Me 3.

A-Vic

Thanks peeps :001_smile: