Issue/Symptom/Question

How does PENTA work when a discount is taken on an Accounts Payable Invoice?

Applies To

AP Invoices

Payment Terms

Discounts

Resolution/Fix/Answer

When Discount is set to Book to Gross Amount, PENTA does the following for Discount Payment Terms:

 Example:  $100 invoice with 5% Tax applicable and 2/10 net 30 terms

Tax on vendor Invoice:

Debit Expense                   105

Credit   AP                                         105

Payment within 10 days and Discount taken:

Debit AP                             105

Credit    cash                                     103

Credit    Discount                                 2

No Tax on vendor Invoice, PENTA Accrues Tax:

Debit Expense                   105

Credit   AP                                         100

Credit   AP Sales Tax                            5

Paying Vendor and Tax Vendor at same time:

Debit  AP                            100

Debit  AP Sales Tax              5

Credit    cash - vendor                       98

Credit    cash – tax vendor                   5

Credit    Discount                                 2