Question

Journalise- Paid cash вВє40,000 to Suresh, availed discount of 2%

Answer 1

Given" Paid cash 40,000 to Suresh, availed discount of 2%"

Discount recieved = 2%

40000×2% = 800

actually paid = payable - Discount

= 40000-800

=39200 is paid by cash

so Discount recieved= 800..its a gain to us....

The transaction affects three accounts... Suresh account (we owe money) , Cash a/c(paid 38600 ) , Discount recieved a/c( recieved 2% Discount; 40000×2% = 800 )..

Suresh account is a Personal account (as the name suggests)

cash account is a Real account (All the assets and Liabilities come under Real account; cash is an asset)

Discount Recieved is a nominal account (All expenses incomes gains losses come under nominal account and Discount recieved is a gain)


The Three golden rules of accounting are..

Personal account - Debit the receiver credit the giver..

Nominal account - Debit All expenses and losses, credit All incomes and gains

Real account - Debit what comes in ,credit what goes out.

in contention with the above rules..

Suresh should be debited (he is the receiver)

Discount Recieved hould be debited (its a gain)

Cash should be credited (it is going out).


So the journal Entry will be...

Suresh Dr 40000

To Discount recieved a/c 800

To cash a/c. 39200

(Being amount due to Suresh settled )