Amount owed to suppliers when businesses buy goods on credit.

Amount owed to suppliers when businesses buy goods using cheque.

Amount owed to suppliers when businesses buy goods and non-current assets on credit.

Amount owed to suppliers when businesses buy non-current assets on credit.

Return policy

Trade discounts

Cost of inventory

Credit terms

Decrease

L-

Increase

L+

No effect

Decrease

L-

Increase

L+

No effect

Cash discount

Trade discount

Yes

No

Dr Inventory

Cr Cash at Bank

Dr Inventory

Cr Trade payables

Dr Trade payables

Cr Inventory

Amount

1 more entry for trade discount

No difference

Dr Trade payables

Cr Cash at Bank

Dr Trade payables

Dr Discount allowed

Cr Cash at Bank

Dr Trade payables

Cr Cash at Bank

Cr Discount received

Increase

Decrease

No effect

Increases the amount owed by credit customers who were previously undercharged

Informs credit customers of the amount owed after goods/services sold on credit

Reduces the amount owed by credit customers due to: overcharging or returns of goods

Acknowledges payment received from customers immediately after goods/services are sold/provided

Capital Expenditure

(+ Equipment)

Revenue Expenditure

(+Delivery and Installation expense)

The balance brought down from last month

The business has a balance of $1200 in Best Sound account.

The balance for Best Sound

The business owed its credit supplier, Best Sound $1200.