Question

journal entry of paid to shyam 14750 and discount received 250

Answer 1

Journal entry 

shyam A/c  Dr                     15000
    To discount allowed A/c                 250
     To cash/bank A/c                        14750
(being paid to shyam )

Answer 2

Concept:

Discount Received-

• Discounts are frequently used in both business-to-business and business-to-consumer transactions to encourage both credit and cash sales.
• They are typically given in exchange for something, such as fast payments, good business practises, recoveries, etc.
• The "Discount Received Account" is credited when a journal entry for a discount is posted.
• Discounts are recorded on the credit side of a profit and loss account as gains for the company.
• Trade Discounts: Trade discounts are not included in the primary financial statements, but they are included in the books of accounts together with cash discounts and other discounts.
• Trade discounts are those that are provided at the time of purchase, such as when items are bought in bulk or to keep repeat customers.
• Cash Discounts: Customers are given a cash discount as a reward for paying their debts related to credit purchases on time.

Given:

Paid = 14750

Discount = 250

Find:

Pass Journal Entries

Solution:

Shyam A/c   Dr.             15000

           To Discount Received       750

           To Cash                              14750

(Being cash paid to Shyam and dicsount received.)

Hence, we can conclude that the total amount to be paid to Shyam was Rs. 15000 but due to the discount , he was paid only Rs. 14750

#SPJ2