Meaning of Discount in tally?
What is discount in tally? Some percentage is deducted or reduced from the original price of any product, it is called discount. Let me explain discount to you in a simple way. If you went to a shop to buy a computer and on that you are getting that computer for 40000/-. If the shopkeeper tells you that you buy the computer in cash, I give you a discount of 10%, then you will get a discount of 4000/- in total, this is called discount in simple language.I tell you about what is the types of discount In which I tell you what are cash discounts, what are trade discounts and what are quantity discounts.
What is Cash Discount in Tally?
What is cash discount? In cash discount, the seller gives a discount to his buyer in the form of cash. The reason for which is that the seller should get the money from the buyer on time. The seller has the advantage of cash discount that he gets money quickly in exchange for his item. In fact, there is no discount, sales adopt new tricks to entice their customers so that their customers buy their goods quickly. They tell the price of the item to the customer by adding more money to their goods than before. The benefit of cash discount is that there is no risk of losing money to the sales and the customer also buys the item cheaply. Discount is according to the seller, if the seller gives a discount of 5% on his item on payment within 30 days and 10% on payment at the same time, then surely the customer buys that item at the same time. Due to which the shopkeeper also gets benefit and the customer also gets 10% discount.
What are Quantity Discount in Tally?
Definition of quantity discount :- Quantity discount is opposite to cash discount. Because this discount depends on the quantity. In this, this offer is given by the seller to his customer that if you buy any item in more quantity then you will be given more discount and if you buy any item in less quantity then you will be given less discount. This is also the reason behind this that to entice the customer, the shopkeeper gives quantity discount so that his goods are sold as soon as possible. Because when the seller sells an item to a buyer and the buyer buys goods in more quantity, then the seller gets more profit or income. And it is often seen that quality doesn’t matter when customers get more discounts. From this, the seller gets this profit that if his product is sold more, then his image in the market also increases. And slowly it becomes a brand. By giving quantity discount, the seller gets less profit but his goods get sold quickly.
What are Trade Discount in Tally?
Definition of Trade Discount: Trade discount is a reduction in the published price of a product. For example a high volume wholesaler may be entitled to a 40% trade discount, while a medium volume wholesaler offers a 30% trade discount. A retail customer will not get a trade discount.
There is no solicitation or discount of any kind in Trade Discount. The reason for giving it is that the sale of their item in the market is high. In this, the seller gives more discount to the wholesaler of higher volume. And a little less to the wholesaler than them and those who are retailer, if the saller wants to give discount or can not give. Trade Discount This has the advantage that when a buyer buys your goods in more quantity, then the sales of the seller are also high and his brand name also becomes in the market.
What is Discount in Tally Accounting ?
The word discount is not always used for profit in accounting. Discount income can also be there in accounting and there can also be expenses. It depends on whether you are getting discount or you are giving discount to any person. For this I will explain you by giving some examples. Take the goods you have a clothes shop and sell your shirt worth Rs 1000/- to a customer. If you have given 10% discount to that person then you will get only 900/- for that shirt and Rs 100/- will be indirect expenses for you. And when you enter it in the books of your tally, then you will have to show these expenses towards the indirect expenses of the profit and loss account.
But if you have purchased 100000/- clothes from any of your places and if you have been given 10% discount by the seller then you have to pay 90000/- to the seller and 10000/- which you got the discount will be your tally. In the books indirect income of profit and loss has to be shown.
What is Discount Formula in Tally Accounting
I will tell you what is the discount formula. And how does the discount formula work? Suppose you purchased an item for Rs. 2500/- and gave you a discount of 20% on that item. So for this you have to use this formula.
Discount = Original price X Rate of discount
2500 X 0.20
Total discount 500/-
And if you want to find out its sales price
sales price = original price – discount
By calculating the discount rate with this formula, your discount will also be known and you also get to know its sales price.