Question

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Answer 1

Answer:

Trade discount is not recorded in the books of accounts..it is deducted from the) List price of that product at the time of Purchase itself.. That net amount is considered to be the historical price of that product and is recorded in the books of accounts.

Given List price = 20000

Trade discount=20%@20000=4000

Purchase price= 20000-4000 = 16000

Also given that Amount is recieved in the form of Cheque....

So the current transaction affects two accounts..

Purchases (nominal) account and Bank (real) account...

The Three golden rules of accounting are

Personal account - Debit the receiver credit the giver

Real account - Debit what comes in credit what goes out

Nominal account - Debit All expenses and losses credit all incomes and Gains

as Per above rules

since Purchases is an expense so should be debited, Bank amount is outgoing so should be credited..

Os the Journal Entry will be.

Purchases a/c Dr 18000

To Bank a/c. 18000

(Being Goods Purchased from vishal)

Answer 2

Explanation:

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