Question

By what amount will be bank account debited with, if goods are sold to Sid at the list price of 4,00,000 less 20% trade
discount and 2% cash discount and paid 50% by cheque?

(a) 3,20,000
b) 1,60,000
(c) 1,56,800
(d) None of these

Answer 1

Answer:

156800

Explanation:

400000*20/100 = 80000

(trade discount not taken in books of accounts)

The actual price will be 400000 - 80000= 320000

320000* 50 /100= 160000

Cash Discount = 160000*2/100= 3200

Amount Debited in bank account = 160000 - 3200 = 156800

Answer 2

Answer:

156800 will be the amount that will be debited to the bank account.

Explanation:

STEP 1: goods are sold to Sid at the list price of 4,00,000 less 20% trade

discount

= sales x trade discount / 100

=400000*20/100

= 80000

(trade discount is not recorded in  the books of accounts)

STEP 2 :  actual price calculation

The actual price will be

= sales - trade discount

=400000 - 80000

= 320000

STEP 3 :  paid 50% by cheque

= amount received x 50/100

=320000* 50 /100

= 160000

STEP 4: Cash Discount

Cash Discount Will be

= 160000*2/100

= 3200

STEP 5 : amount to be debited in the bank account

Amount Debited in the bank account

= 160000 - 3200

= 156800

Thus, 1,56,800 will be debited to the bank account.

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