1. Home
  2. General Accounting
  3. Which tax line should be assigned to "Discounts"?

Which tax line should be assigned to "Discounts"?

I'm using QB Pro 2006 (CANADIAN), my wife has a small publishing company. She applies a fixed % discount on books sold to the authour and to customers such as resellers, libraries, etc.

Everything has worked out fine as far as day-to-day transactions and remitting the GST return. But now that it's tax time, I realise that the "Discount" account was setup without a Tax Line being assigned.

I assume this is a reduction of the cost of goods sold, but I'm unclear as to which tax line to assign to that account.

Any insight would be appreciated. TIA -A.

Reply to
Albert Camus
Loading thread data ...

A sales discount is generally a reduction of income, or in some circumstances an increase in selling expenses, but never a reduction of COGS.

The Tax Line for a reduction of income should be the same as for Income. If it is a selling expense (less likely), select an appropriate line for that purpose.

Why would you not ask your accountant?

Reply to
!-!

Thanks for the reply. I did mis-speak/type. I should have said it was a component , not a reduction of COGS.

As for asking my accountant, I suppose, like most everyone else here, if i was willing to pay an accountant for advise, i wouldn't have found this newsgroup.

Reply to
Albert Camus

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.