on selling goods for cash of the list price of 40000 at 15% trade discount and 4% cash discount cash account will be debited by
Answers
Answer:
40000 - 15% = 34000
34000 - 4% = 32640
The Cash Account will be debited by 32640
Answer:
Rs 360 on debit side
Trade discount is never shown in a journal entry. Cash discount of Rs 360 shall be posted on debit side of discount account.
Explanation:
Net price = List price – Trade discount. Therefore, trade discounts are not recorded in the books of accounts. However, on the other hand, cash discounts are recorded in the books of accounts. Cash discounts are usually allowed on the invoice price of the goods.
Trade discounts are not recorded in the buyer's or seller's respective books of accounts. It is always subtracted prior to any kind of exchange.
To calculate the cash discount, the formula uses the price and the rate. The formula reads: Cash Discount = Purchase Price x Discount Rate. For example, if the price of the product is $200 and the discount rate is 10%, then the cash discount would equal $20, which means the consumer saves $20
To learn more about accounts visit
brainly.in/question/8827659
brainly.in/question/34036409
#SPJ2