Question

What is the account type for discount received?

Answer 1

Discount received is Nominal account type.

1) Nominal Account types are related to income or gains and expenses or losses

2) There are three type of account , Personal , Real and Nominal

Personal type ilare related to person , such as capital , party account ect

Real account type are relatedAssets or properties , this can be tangible and intangible.

3) Golden rule for nominal type of account is Debit the expenses or loss and credit the income or gain .

4 )Discount receive decreases the expense amount , decrease in expenses is gain or Income , hence discount received will be credited . If it is trade discount is reduces from Expense or purchases and if it is cash discount it is shown as Income in Income Statement.