687 Purchase Allowances
Cost of Sales
Fixed Operations
Cost of Sales Synopsis
Account 687 is established to record the cash or credit from the manufacturer for ordering and/or selling Parts and Accessories under regular or promotional programs.
Debits |
Credits |
|
|
Example 1
Record the purchase of a stock-order from the manufacturer for $16,585 of which $1,265 is a Purchase Allowance.
Journal: Purchase
Entry: |
|
Debit |
Credit |
Account 242 |
Inventory – Parts & Accessories |
$16,585 |
|
Account 300 |
Accounts Payable – Trade Creditors |
|
$15,320 |
Account 687 |
Purchase Allowances |
|
$1,265 |