A business enterprise allows a certain discount to its debtors as a token of encouragement to prompt payments. This provision is given to the good debtors only. This is calculated on the amount of the debtors arrived at after deducting the doubtful debts. This is further shown as the deduction in the debtors account so that the expected value is portrayed accurately. Refer to the NCERT Solutions of Chapter 10 of Class 11 Accountancy to learn more about this.