help me with dis transaction(journal entry)
Purchased goods from Palak of the list price 20,000 @5% trade discount and 10% cash discount and paid 60% amount in cash.
Answers
Answered by
2
purchase = 20000
trade discount = 20000*5%
=1000
cash paid = 19000*60%
=11400
cash discount = 11400*10%
=1140
Journal entry
purchases a/c Dr 19000
To discount A/c 1140
To Cash a/c 10260
To Palak A/c 7620
(being purchases made)
Hope its useful..!!!
RohitSaketi:
urs only
thanks :)
change ur answer
haa i will ask moderator for an edit
@Swarup1998 what mistake u found it .. pls specify
what happened.. i asked him for an edit option..he gave u or what
its his mistake..dont worry..ur answer is correct only
but he reported as my answer has mistake
dont worry nthng will happen
lets see
Answered by
2
Trade de Discount is not recorded in the books of accounts unlike cash discount..It is deducted from the List price of that product at the time of Purchase itself and the net price is considered to be the historical price of that product....But Cash Discount unlike Trade discount is recorded in the books of accounts....
Given
"Purchased goods from Palak of the list price 20,000 @5% trade discount and 10% cash discount and paid 60% amount in cash."
Purchased Goods worth 20000..so List price=20000
Trade Discount rate =5%
Trade Discount= 20000×5% = 1000
Selling Price (net price) = List price - Trade Discount
= 20000 - 1000
=19000
Cash Discount rate =10%
Cash Discount= 19000×60℅×10%=1140
.. The current transaction affects 4 accounts...
Purchases a/c (We Purchased the Goods)...cash a/c(60%amount is received in cash), Discount recieved a/c (we received discount) , Palak a/c (only 60%is recieved in cash,remaining 40%is on credit)
Purchases a/c and discount received a/c are nominal accounts (all the expenses incomes gains losses come under Nominal account) and cash account is a real account (all assets and Liabilities come under Real accounts).. Palak a/c is a Personal account..
The Three golden rules of accounting are
Personal account - Debit the receiver credit, the giver
Real account - Debit what comes in credit ,what goes out
Nominal account - Debit All expenses and losses, credit all incomes and Gains
As Per the above rules..since Purchases is an expense to us it should debited and Discount recieved is a gain..hence should be credited....
Cash is outgoing,so it should be credited...Palak is the giver..so she should be credited.
The Journal Entry will be...
Purchases a/c Dr 19000
To cash a/c 10260
To discount received a/c 1140
To Palak a/c 7600
(Being Goods Purchased)
Given
"Purchased goods from Palak of the list price 20,000 @5% trade discount and 10% cash discount and paid 60% amount in cash."
Purchased Goods worth 20000..so List price=20000
Trade Discount rate =5%
Trade Discount= 20000×5% = 1000
Selling Price (net price) = List price - Trade Discount
= 20000 - 1000
=19000
Cash Discount rate =10%
Cash Discount= 19000×60℅×10%=1140
.. The current transaction affects 4 accounts...
Purchases a/c (We Purchased the Goods)...cash a/c(60%amount is received in cash), Discount recieved a/c (we received discount) , Palak a/c (only 60%is recieved in cash,remaining 40%is on credit)
Purchases a/c and discount received a/c are nominal accounts (all the expenses incomes gains losses come under Nominal account) and cash account is a real account (all assets and Liabilities come under Real accounts).. Palak a/c is a Personal account..
The Three golden rules of accounting are
Personal account - Debit the receiver credit, the giver
Real account - Debit what comes in credit ,what goes out
Nominal account - Debit All expenses and losses, credit all incomes and Gains
As Per the above rules..since Purchases is an expense to us it should debited and Discount recieved is a gain..hence should be credited....
Cash is outgoing,so it should be credited...Palak is the giver..so she should be credited.
The Journal Entry will be...
Purchases a/c Dr 19000
To cash a/c 10260
To discount received a/c 1140
To Palak a/c 7600
(Being Goods Purchased)
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