The Discounts Allowed Day Book
The Discounts Allowed Day Book (“DADB”) is used to record information taken from the credit notes issued in respect of prompt payment (or early settlement) discounts given to a business’ customers. It is therefore similar in nature to the Sales Returns Day Book which records information from other types of credit notes issued to customers.
The DADB will record at least the following information taken from these credit notes:
- The date of the credit note
- The name of the customer
- The reference assigned to that customer
- The credit note number/reference
- The gross amount on the credit note
- The VAT on the credit note
- The net discount allowed on the credit note
At the end of an accounting period, a bookkeeper will add the totals of the columns and perform a cross-add check to help ensure the book is accurate. The total of the Net and VAT columns should equal the total of the Gross or Total column, if not, we know that an error has occurred which should be investigated and corrected.
The Discounts Received Day Book
The Discounts Received Day Book (“DRDB”) is used to record information from credit notes received from its suppliers after it takes advantage of prompt payment (or early settlement) discounts offered by its suppliers. It is similar in nature to the Purchases Returns Day Book which records information from other types of credit notes received from suppliers.
The DRDB will record similar types of information from these credit notes as was recorded in the DADB:
- The date of the credit note
- The name of the supplier
- The reference the business assigns to that supplier
- The number/reference assigned to that credit note
- The gross amount on the credit note
- The VAT on the credit note
- The net discount received on the credit note
