Question

Journal Entry for 'sold goods for cash of the list price of ₹ 20,000/- at 10% trade discount and 3% cash discount' .​

Answer 1

Answer:

Cash a/c. Dr. 17,460

Discount a/c. Dr. 540

To Sales a/c. 18,000

18,000. 18,000

Explanation:

So Here, We applied

Step 1. : 10 % trade discount @20,000 which gives you a value of 18,000.

Step 2 : And we have a cash discount of 3% on 18,000 i.e 540

Therefore , Trade discount is given on the catalogue price of the goods while the cash discount is given on the invoice price. Thats we deducted 540 from 18,000 which gives you a value of 17,460. Hope it helps !