Question

Goods purchased from Rahul cost price Rs 20,000 and trade discount @20% VAT paid @10%.
Write the journal entry ?

Answer 1

hello Frnd

List price = 20,000
less trade discount = 20,000 × 20/100 = 4000

sales price = 16,000
VAT is always charged on selling price.

VAT charged = 16000 × 10/100 = 1600


Now Journal entry

Purchase A/C dr. 16000

VAT charged A/C dr . 1600

To Rahul A/C 17600

(being goods purchased and VAT charged @10%)


While maintaining accounts, Trade discount is not considered.





hope it helps
#jerri