Question

Enter the following transaction in the journal of nikhil may 4 sold goods of list price Rs 100000 at 10% trade discount to prashant. may 8 Goods of list price Rs 4000 was returned by prashant. may 14 he settled the account by receiving 5% cash discount​

Answer 1

Answer:

4th May: Debit Receivables 90000

Credit Inventory. 90000

8th May: Debit Inventory 3600

Credit Receivables 3600

14th May:. Debit Cash 82080

Debit Discount Expense 4320

Credit Receivables 86400

Explanation:

First goods are sold at discount of 10% so receivables will be 90000.

then goods at list price of 4000 are returned which are sold at 10% discount for 3600. so receivables of 3600 are reversed.

and when payment is settled at further 5% discount. discount will be treated as expense