An accounting question on discounts
Discussion
If you charge a client £500 for product X, which costs and is worth £500
And you give client product Y for free, which is worth £100...
Can you create an invoice for the total amount of £600+vat and apply a £-100+vat discount, and write the loss off in some way (and benefit by doing so) when the end of year accounts are handed over?
And you give client product Y for free, which is worth £100...
Can you create an invoice for the total amount of £600+vat and apply a £-100+vat discount, and write the loss off in some way (and benefit by doing so) when the end of year accounts are handed over?
The original product would be included in your normal "Purchases" heading at its original cost to you.
If you decide to sell it for less than the normal selling price, the reduced margin is already included in the equation as your sales value will be a little less than it should have been. In other words, the "write off" is taken into account by just posting the purchase and sale of the item in the normal way.
If you decide to sell it for less than the normal selling price, the reduced margin is already included in the equation as your sales value will be a little less than it should have been. In other words, the "write off" is taken into account by just posting the purchase and sale of the item in the normal way.
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