how discount is treated in 2 column cash book plzz help me....urgently
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when discount is involved in any transaction, then we have to make a three column cash book, wherein discount allowed will be shown as a separate column along with bank and cash columns on the debit side and the same way
discount received will be shown on the credit side.
if supposing we are giving a discount of 500 rs. to Mr. A on a total amount of Rs. 5000, then in the particulars column on the dr side , we will write
Mr. A A/c and then in the bank column or cash column (depending whether it is a cash payment or cheque) we will write 4,500 (5000 - 500) and then in the discount allowed column , we will write 500
if discount is received from any party, we will write the amount actually paid against the bank or cash column and discount received in the discount received column on the credit side.
discount received will be shown on the credit side.
if supposing we are giving a discount of 500 rs. to Mr. A on a total amount of Rs. 5000, then in the particulars column on the dr side , we will write
Mr. A A/c and then in the bank column or cash column (depending whether it is a cash payment or cheque) we will write 4,500 (5000 - 500) and then in the discount allowed column , we will write 500
if discount is received from any party, we will write the amount actually paid against the bank or cash column and discount received in the discount received column on the credit side.
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