Question

d) Purchase of goods from Naveen of the list price of Rs.2.000. He allowed 10% trade discount,
Rs.50 cash discount was also allowed for quick payment.


pass journal entry​

Answer 1

Answer:

purchases A/c..............Dr 1800

to discount received 1750

to cash 50

Explanation:

2000-20%=1800.

trade discount is allowed on list price and it's not part of journal

Answer 2

Answer:

Purchases a/c            -Dr       1800

    To Discount Received a/c     50

    To Cash a/c                            1750

(Being Goods purchased from Naveen)

Explanation:

Purchases = 2000-(2000*10%) = 2000-200= 1800

Cash = 1800-50=1750

To encourage sales, trade discounts are permitted as a blanket discount for all clients. Trade discounts are permitted on list prices, and sales are based on net prices, which are list prices less trade discounts. Since it is not documented in books of account, trade discount

A trade discount is, to put it simply, a discount that is granted by the seller to the buyer at the time of the purchase of goods. The list price or retail price of the quantity sold is reduced to reflect it. The merchants typically give this discount in order to draw in more customers and get large orders, or to boost sales. As a result, there should be no record in either party's books of accounts.

It is a product discount that is permitted as a reduction in the selling price. It refers to the price reduction that a manufacturer or wholesaler makes when selling a product to a retailer.

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