Journal entry of goods costing rupees 12000 sold to mr. X, issued invoice at 25% 15000 cost less 10% trade discount
Answers
Mr.X A/C Dr Rs.13,500
To Sales A/C Rs.13,500
(being, goods sold to Mr.X )
3 golden rules
• debit the receiver , credit the giver
• debit what comes in , credit what goes out
• debit all the expenses and losses , credit all the incomes and gains
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reason for debit and credit
sales A/c - nominal A/c , where is the income to the company therefore its credited
Cash A/c - Real A/c , where money comes into the business therefore its debited
* note - i assume its a cash sales
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Calculation of trade discount
Trade discount = sales * 10
= 15000*10%
=1500
Net bill amount = sales - trade discount
= 15000 - 1500
=13500
* Trade discount will be deducted from sales amount . no journal entry passed for trade discount
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Journal entry
Cash A/c Dr 13500
To sales A/c 13500
(being sold goods)