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Thread: Discount reversed on goods returned

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    Discount reversed on goods returned

    Hi

    If I have an agreement with my creditor to pay 30 days less 2.5% (settlement discount) and I deduct the discount, make the payment and then return some goods, do I reverse the discount and pay that amount to the supplier?

    This doesn't make sense to me, I take my discount on payment because I am a good payer.
    The creditor should only credit me the amount I have paid.

    Please could someone assist with reference to accounting standards.

    Thank you

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    Quote Originally Posted by studentofaccounting View Post
    The creditor should only credit me the amount I have paid.
    That's the crux right there. Typically the credit will be for the invoiced value because the credit for the return of goods is reversing the purchase transaction, not the payment transaction.

    Correcting the payment transaction becomes another entry.
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