Income statement Discounts Received

A-Vic
A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
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)

Comments

  • crispy
    crispy Registered Posts: 466 Dedicated contributor 🦉
    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
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
    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
    crispy Registered Posts: 466 Dedicated contributor 🦉
    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
    AK002 Registered Posts: 2,492 Beyond epic contributor 🧙‍♂️
    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
    A-Vic Registered Posts: 6,970 Beyond epic contributor 🧙‍♂️
    Thanks peeps :001_smile:
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