Discount accounts are defined in the discount window and attached to the bank accounts.

Earned Discount: You use activities of this type in the Adjustments and the Remittance Banks windows. Use this type of activity to adjust a transaction if payment is received within the discount period (determined by the transaction's payment terms).

Unearned Discount: You use activities of this type in the Adjustments and the Remittance Banks windows. Use this type of activity to adjust a transaction if payment is received after the discount period (determined by the transaction's payment terms).

1. Indicate how Receivables should derive the accounts for the expense or revenue generated by this activity by specifying a GL Account Source. Choose one of the following:

Activity GL Account: Allocate the expense or revenue to the general ledger account that you specify for this Receivables Activity. If the activity type is Bank Error, Claim Investigation, Endorsement, Finance Charge, Prepayment, Receipt Write-off, or Short Term Debt, you can only choose this GL account source.

Distribution Set: Allocate the expense or revenue to the distribution set that you specify for this Receivables Activity . A distribution set is a predefined group of general ledger accounting codes that determine the accounts for miscellaneous receipts and payments. You can choose this option only if the activity type is Miscellaneous Cash.

Revenue on Invoice: Allocate the expense or revenue net of any tax to the revenue account(s) specified on the invoice. If Tax Code Source is set to None, allocate the gross amount to these accounts. You can only choose this option if the activity type is Adjustment, Earned Discount, or Unearned Discount.

If the revenue on the specified invoice is unearned, then Receivables calls the Revenue Adjustment API, which uses AutoAccounting to derive the anticipated revenue accounting distribution accounts and amounts. The accounting engine then uses this information to allocate the adjustment or discount amount to these derived revenue account(s).

Tax Code on Invoice: Allocate the net portion using the Expense/Revenue accounts specified by the tax code on the invoice. If Tax Code Source is set to None, allocate the gross amount to these accounts. You can only choose this option if the activity type is Adjustment, Earned Discount, or Unearned Discount.

In the event of an adjustment to an invoice with zero amount revenue distributions, the adjustment activity's GL Account Source must not be set to Revenue on Invoice or Tax Code on Invoice

2. Specify a Tax Code Source to indicate where Receivables derives the tax code for this activity. Choose one of the following:
Activity: Allocate the tax amount to the Asset or Liability tax accounts specified by the Receivables Activity.
Invoice: Distribute the tax amount to the tax accounts specified by the tax code on the invoice. You cannot choose this option if the activity Type is Miscellaneous Cash or Finance Charges.
None: Allocates the entire tax amount according to the GL Account Source you specified. Choose this option if you do not want to separately account for tax.
In the event of a tax adjustment to an invoice with zero amount tax distributions, the adjustment activity's Tax Code Source must not be set to Invoice.