Question

Bought stationery from lily stationeries at R4980, less 10% trade account. Received invoice 123

Answer 1

Answer:

Given" Purchased goods from dinesh worth rupees 4980.,10%trade discount and 5%cash discount.Half of the amount paid to him immidiately journal entry"

This transaction affects four accounts.. Purchases account (Goods are Purchased) ,Dinesh account (purchased from Dinesh), Cash account (half of the amount is paid in cash), cash Discount recieved (Discount being received)

Trade Discount is not recorded in the books of accounts unlike cash Discount..it is deducted from the List price and net price is considered to be the historical price of that product...

Trade Discount rate = 10%

List Price= 4980

Trade Discount amount = 4980 × 10% = 498

Actual Price= List price - Trade Discount amount

= 4980 - 498 = 4482

out of 4482.