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Accounting And Tax Treatment Of Cash Discounts

2015/5/18 22:07:00 23

(1) definition of cash discount.

Cash discount refers to the deduction of debt provided to the debtor in order to encourage the debtor to pay within the specified time limit.

Cash discounts usually occur in pactions in which goods are sold on credit and services are provided, in order to encourage customers to advance in advance.

Reimbursement of payment

It is usually agreed with the debtor that the debtor can enjoy different discounts within different periods.

Cash discount is generally indicated by the symbol "discount / payment date".

For example, 3/10 indicates that the buyer can pay 3% discount on the price within 10 days. 2/20 means that the buyer can pay within 2% days of the price within 2% days. The n/30 says that the payment period is within 30 days, and if 20 days later 30 days, no discount will be granted.

(two) accounting treatment of cash discounts.

The accounting method of cash discount includes two kinds: the total price method and the net price method.

The total price method is usually adopted in accounting practice in China.

The lump sum approach is the incentive payment for the buyer's early payment in the event of sales, receivables and sales income before the actual discount occurs before the cash discount is deducted.

(three) tax treatment rules for cash discounts.

The regulations on the VAT disposal of China stipulate that the discount of cash discount (sales discount) shall not be from

Sales volume

Deductions should be included in the financial charges.

The income tax law stipulates that the deduction of debts provided to the debtor by the creditor in order to encourage the debtor to pay within the prescribed time limit is a cash discount. If the sale of goods involves cash discounts, the amount of sales proceeds should be determined according to the amount before deducting the cash discount, and the cash discount shall be deducted as a financial expense when the actual occurrence occurs.

In fact, the popular law is that the tax law doesn't matter what kind of payment you receive when you receive the money. Anyway, your goods are worth so much money, so you have to pay so many taxes at this price.

However, there was a real loss, so it was recorded in the "financial cost" and then deducted when the income tax was paid.

(four) illustrating cash discounts in accounting and

Taxation

Deal with

The value added tax rate of the company a company is 17%. In March 1, 2009, a company sells a batch of goods to company B. According to the price marked on the price list, the total price of the VAT is 20000 yuan, to encourage the company to pay early payment. The cash discount conditions stipulated by a company are 2/10, 1/20, n/30.

The accounting entries under the lump sum method are:

Borrowing: accounts receivable 23400

Loan: main business income 20000

Tax payable - value added tax (sales tax) 3400

1. The calculation of value added tax on cash discounts:

Assume that B company pays in March 10th:

Borrow: bank deposit 22932

Financial cost 468

Loan: accounts receivable 23400

Assume that B company pays in March 20th:

Borrow: bank deposit 23166

Financial cost 234