Question

Goods purchased at 10% trade & 1% cash discount for 10000

Answer 1

List Price = Rs.10,000

Trade Discount. = Rs.10,000 × 10% = Rs.1000

Agreed Price. = Rs.9000

Cash Discount = Rs.9000 × 1%. = Rs 90

Journal Entry :

Purchases A/C. Dr. Rs.9000

To Discount Received A/C. Rs. 90

To Cash A/C. Rs.8910

(Being goods purchased )