What is the balance of discount, credit or debit? (We have to take in account discount received or discount allowed?)

Dear Student


From the basic rule of accounting - We know that Discount account is a nominal account. 

Rule of nominal account says that - Debit all expenses and losses and Credit all income and gains.

Therefore from the above rule :
Discount allowed is an expense and hence it shall have debit balance.
Discount received is an income and hence its balance is credit balance.


Regards

 

  • 0
Discount (debit) means expense i.e.discount allowed ; and Discount (credit) means income i.e. discount received.
  • 0
I know that already @shubham but what are we supposed to do when only the word "discount" is given? What will be the balance in that case?
  • 0
What are you looking for?