Cash discount cost, how to calculate cash discount

The cash discount cost refers to the potential revenue (opportunity cost) lost by the purchaser payer due to the waiver of the cash discount offer and the use of commercial credit funds during the non-cash discount period, which is generally expressed as a relative number.

The cash discount cost is generally calculated based on the credit amount and the cash discount rate, which is the ratio of the allowable discount amount to the credit amount over a certain payment period. The size of the cash discount rate is related to the length of the payment period, the shorter the payment period, the greater the cash discount rate, and vice versa.

The cost of cash discount is actually a deduction of cash income, and the credit seller decides whether to provide and to what extent the cash discount is provided, focusing on whether the benefit after providing the discount is greater than the cost of the cash discount.

The length of the cash discount period and the extent to which the cash discount rate is given by the credit seller must be examined in combination with the credit term and the benefits obtained from accelerated collection and the cash discount cost paid.

Because shortening the credit term will lead to a decrease in the opportunity cost of funds, management costs and bad debt costs, and an increase in the cost of cash discounts.

Therefore, the use of cash discount to adjust the credit policy and determine the most favorable credit term and cash discount period is precisely to use the relationship between the cash discount cost and other credit costs to weigh the pros and cons and strive for the best operating efficiency.

Let's start with the last question: let's say you want to pay 100 yuan.

Plan A - 10-day payment plan: get discount 3, use 97, borrow for 20 days (30-10) interest (97 20% * 20 360).

then the net income of the program.

Plan B - 20-day payment plan: get discount 2, use 98, borrow for 10 days (30-20) interest.

then the net income of the program.

Therefore, you should choose option A.

You will be in front of you, I will not talk about it, the teacher said, the result of giving up the cash discount cost rate is whether to enjoy the discount or not.

In cases where the cost of waiving the cash discount for multiple options is qualified, the net benefit is calculated to select the best option.

This is the content of page 236 of Chapter 7, Section 5, 2013 edition of Intermediate Financial Management.

Cash discount. There are three discount conditions, which are also the calculation method of cash discounts, which are 2 10, 1 20, n 10 refers to the customer can enjoy a 2% cash discount on the product when paying within 10 days, and the use of the original **minus 2% of the product ** is the existing product** 20 refers to the customer can enjoy a 1% cash discount on the product when paying within 20 days, and the use of the original **minus 1% of the product** is the ** of the existing product; 3. N 30 means that there is no discount for customers to pay within 30 days.

Extended information: Cash discount, also known as sales discount, is a preferential way for merchants to reduce goods and seek benefits for customers in order to encourage buyers to buy quickly and pay for the relevant assets. Common cash discounts are 20, N 30.

Cash discount is a very important factor in the financial management of enterprises, and for enterprise sales, cash discounts play a very significant positive significance: it can not only shorten the collection time of merchants, but also reduce the bad debt losses of merchants.

At the same time, cash discounts also have a certain negative impact, and business cash discounts reduce corporate financial expenses.

Actual cash flow included in the company.

There will be less. Cash Discounts Cash discounts are deductions given to encourage purchasers to pay early within a certain period of time. For example, 2 10, net 30 (2 10, net 30), means:

If payment is made within 10 days, the purchaser will receive a 2% discount on the face value of the invoice. Otherwise, pay the full amount of the invoice within 30 days. And, it is often noted or understood that the interest charge will increase after the 30-day credit term.

Cash discount is the accounting method of enterprise financial management Xiangxiang Xiaoli Total price method, net price method and allowance method.

The total price is a good way to record accounts receivable.

and Sales Revenues Quick Navigation Accounting Methods Accounting Reports.

Differences in Handling Examples Introduction Cash discount is an important factor in the financial management of enterprises, and for sales enterprises, cash discounts have two positive significance: shorten the collection time and reduce the loss of bad debts. The negative effect is to reduce cash flow, because the discount partially offsets the finance costs, and the actual money received is less.

As a result, selling businesses are trying to put the discount rate.

Determine above the level of balancing the positive and negative effects. Generally speaking, if the purchasing enterprise enjoys this cash discount, it means that the purchasing company is ready to give up the right to use 29,400 yuan within 50 days in order to obtain a 2% discount, i.e. 30,000*2%=600 yuan, which is equivalent to bearing the interest cost of annual interest. 1. If the purchasing company has idle funds or can raise idle funds with an annual interest rate of less than the annual interest rate, it is advantageous to enjoy this cash discount, and 2. If the purchasing company has a shortage of funds, and in the remaining 50 days it raises the interest cost of 29400 at the commercial interest rate or the purchasing company uses 29400 to invest other opportunity costs.

1. Cash discounts.

The calculation formula is as follows: if the cash discount is 2 10, 1 20, n 3 means: 1-10 days to receive the payment, the discount is 2%, the cash discount = price (+ VAT) * 2%, the actual collection should be:

Price (+ VAT)* (1-2%). If the payment is received within 11-20 days, the discount is 1%, and the calculation is the same as above. If you receive the money more than 21 days, you will not enjoy the deduction.

2. The discount base package does not include VAT, which depends on the agreement between the two parties, and there is no hard and fast rule. But no matter how the discount is, the seller has to pay the tax in full. Cash discounts incurred are charged to finance charges.

Extended Materials. 1. Cash Discounts and Commercial Discounts.

The difference. 1. The purpose is different. A cash discount is a debt deduction given to encourage customers to pay early; A commercial discount is a **deduction that is given to boost sales.

2. The time when the discount is different is different. Cash discounts occur after the sale of goods, and businesses recognize sales revenue.

the relevant cash discount cannot be determined, and whether the cash discount occurs after the sale shall be subject to payment by the buyer; The commercial discount has already occurred at the time of sale, and when the enterprise sales are realized, as long as the sales revenue is recognized according to the net amount after deducting the commercial discount, there is no need for accounting treatment.

3. Commercial discount tax treatment. Guo Shui Fa [1993] No. 154 of the State Administration of Taxation stipulates that: "If a taxpayer sells goods by way of discount, if the sales amount and the discount amount are indicated separately on the same invoice, VAT may be levied on the discounted sales amount; If the discount amount is invoiced separately, the discount amount shall not be deducted from the sales amount, regardless of how it is financially treated.

4. Therefore, in tax practice, special attention should be paid to the point that "the sales amount and the discount amount must be indicated separately on the same invoice". The reason why it is necessary to stipulate that the sales amount and the discount amount must be indicated separately on the same invoice for commercial discounts is considered from the perspective of ensuring the consistency of VAT taxation and tax deduction. If one sales invoice is allowed for sales and another red invoice for refund of the discounted amount, the seller may be allowed to calculate the output tax based on the sales amount after deducting the discounted amount.

However, the purchaser deducts the sales amount without deducting the discount. This confusion in the calculation and collection of VAT is not permitted by the tax law.

5. In addition, the commercial discount is limited to the discount of the goods, if the seller uses the goods commissioned by the brother to process or purchase the goods for the discount in kind, the amount in kind cannot be deducted from the sales of the goods, and the goods should be calculated and paid VAT in accordance with Article 4 of the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value-Added Tax.

Cash discount. There are 2 10, 1 20, n 30, which respectively represent: if the buyer pays within 10 days, then the seller will give a discount of 2% of the total price, if the buyer pays within 20 days, the seller will give a discount of 1% of the total price, and if the other party pays within 30 days, no discount will be given.

There are two ways to deal with cash discounts in accounting, one is the total price method and the other is the net price method. But our accounting law.

It is expressly provided that the lump sum method is used for cash discounts.

Cash discounts and commercial discounts.

Differences: 1. Different purposes: debt deductions made by cash discount toast merchants in order to motivate consumers to pay in advance; The commercial discount is mostly deducted for the purpose of carrying out ** activities for the goods;

2. The time when the discount occurs is different: the cash discount is after the sale of the product, after the sales revenue is recognized.

It is not possible to determine the discount, but it depends on the specific situation of the consumer at the time of payment. And the commercial discount is already clear when the product is sold.

The above content refers to Encyclopedia - Cash Discount.

Cash discount. Cost formula: Cash Discount Percentage (1 - Cash Discount Percentage) 360 Deferred Payment Days = Waiver of Cash Discount Cost.

Discount rate calculation formula = (original price - current price) original price x 100%, the discount rate is the sales enterprise to the buyer, which is divided into commercial discounts.

rate and cash discount rate.

A commercial discount is a price paid for maintaining a long-term relationship with the buyer for a long time, and the discount is given to the buyer on the original purchase price.

In the calculation**.

After the discount, the ** = original *** (1 - discount rate) It should be noted here that the VAT amount is calculated according to the new ** after the discount is calculated and confirmed.

And when the seller keeps the book, the amount recorded is the amount after the discount. The discount rate is indicated, and the discount is 1%.

1. Cash discounts.

It is usually expressed as "2 10, 1 10, n 30.""。This means: 2% discount on payment within 10 days; 1% discount for payment within 20 days; The 30-day payment must be repaid in full, and no discount can be enjoyed, and the credit term and discount period are calculated from the date after the invoice date, and the date of remittance by the customer shall prevail.

2. The calculation method is as follows:

The payment period is less than 10 days cash discount rate.

For 2, the actual amount received by Company A is 12 * (10,000 yuan, cash discount = 12 * 10,000 yuan.

3. Explanation:

The question is not wrong, but it is not clearly stated in the question that the VAT rate is taken into account when selling products.

17%, i.e. cash is not included when calculating cash discounts.

A cash discount is a debt deduction provided by a creditor to a debtor to encourage the debtor to pay within a specified period. Cash discounts are generally represented by the symbol "Discount Rate Payment Term", for example, i "2 10,1 20,N 30" means: the seller allows the customer to pay for the longest period of 30 days, if the customer pays within 10 days; The seller can give the customer a 2% discount according to the price of the product; If the customer is in.

Payment within 20 days, the seller can give the customer a 1% discount according to the price of the goods; If the customer pays within 21 days to 30 days, they will not be able to enjoy the cash discount.

The cash discount occurs after the business sells the goods, and whether and how much the cash discount occurs after the business sells the goods depends on the buyer's payment situation, and the enterprise cannot determine the amount of the cash discount when recognizing the revenue from the sale of goods. Therefore, if an enterprise sells goods with cash discounts, it shall determine the amount of revenue from the sale of goods according to the amount before deducting the cash discounts. The cash discount is actually the financial expenses incurred by the enterprise in order to withdraw the funds as soon as possible, and should be included in the current financial expenses when it is actually incurred.

1) When the sale is realized:

Debit: Accounts receivable.

Credit: main business income.

Tax Payable – VAT payable (output tax).

Borrow: Cost of main business.

Credit: Inventory of goods.

2) When the payment is received:

Borrow: Bank deposit.

Finance Expenses. Credit: Accounts receivable.

Borrow: Bank deposit.

Finance Expenses. Credit: Accounts receivable.

Borrow: Bank deposit.

Credit: Accounts receivable.

Opportunity cost refers to the opportunity for an enterprise to give up another business activity in order to engage in a certain camping activity, or to use a certain resource to obtain another type of income. On the other hand, the opportunity cost of cash discount is the rate of return enjoyed by not giving up (enjoying) cash discounts. Credit cost rate for waiver discount = Discount percentage (1 - discount percentage) (360 (payment period, credit period) - discount period)).