Study SimplifyStudy Simplify

Cost, Discounts and Bad Debts

Cost, voucher types, trade discount, cash discount, rebate, and bad debts with treatment in books of account.

Notes

Cost, Discounts and Bad Debts

Class 11 Accountancy — Accounting Terminology

Cost

Cost
Expense on purchasing and/or manufacturing goods.

Cost is the amount of expenditure incurred on or attributable to a specified article, product, or activity.

Voucher

Voucher
An evidence of transaction having taken place.

A Voucher serves as evidence that a transaction has occurred.

Source Voucher

Primary evidence of a business transaction.

Cash MemoInvoice or BillReceiptDebit/Credit Notes

Accounting Voucher

Prepared from Source Vouchers. Shows which account heads are to be debited and credited.

DebitCreditTransfer

Discount — Trade, Cash, and Rebate

Discount
A reduction in price of goods sold or in amount.

Bad Debts

Bad Debts
Debt not recoverable.

Bad Debt is an amount owed to the business that is written off because it has become irrecoverable. It represents a loss for the business.