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Thread: "Reversing" a discount taken

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    Bronze Member michellepace's Avatar
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    Question "Reversing" a discount taken

    Hi there,

    Just a quick question on how to fix a discount I should have never taken.

    1. I owed my supplier R200. I paid him R198.
    2. I imported my bank transactions, and I allocated R2 discount.
    3. My supplier's detailed ledger then showed zero. And I was happy.
    4. Then a month passed by and my supplier told me that I was never granted permission to take an early settlement discount. And he was right.


    Question:
    How do I now "adjust" my suppliers account such that it shows that I still owe him R2? (and all the correct accounts are adjusted).

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    Diamond Member Neville Bailey's Avatar
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    This is the way I would do it.

    Open the Supplier journal and create an entry for the Supplier account, and enter the discount amount as a credit amount. Use the Discount Received account in the Contra column.
    Neville Bailey - Sage Pastel Accounting Consultant
    Phone: 031 521 0080 or 087 095 7895
    neville@accountingsoftwaresupport.co.za
    www.accountingsoftwaresupport.co.za
    IronTree Online Solutions

    "Give every person more in use value than you take from them in cash value."
    WALLACE WATTLES (1860-1911)

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    I prefer to fix it in the original sub-ledger where the entry happened. Open your cashbook, process a supplier payment with the same reference and date. Leave the bank amount as zero and put -2.00 in the discount column.

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    Diamond Member Neville Bailey's Avatar
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    Quote Originally Posted by Kevin Smith View Post
    I prefer to fix it in the original sub-ledger where the entry happened. Open your cashbook, process a supplier payment with the same reference and date. Leave the bank amount as zero and put -2.00 in the discount column.
    In fact, this was my preferred method as well, before I tested it, and I found out that I could not insert a minus sign in front of an amount in the discount column. Have you tried it, Kevin?
    Neville Bailey - Sage Pastel Accounting Consultant
    Phone: 031 521 0080 or 087 095 7895
    neville@accountingsoftwaresupport.co.za
    www.accountingsoftwaresupport.co.za
    IronTree Online Solutions

    "Give every person more in use value than you take from them in cash value."
    WALLACE WATTLES (1860-1911)

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    Hi Neville

    Yes - tested and working my side.

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