Question

paid cash after deducting 4% discount to richard to whom ₹6000 was payable​

Answer 1

Answer:

Explanation:

As richard is our liability and whenever there is an increase in liability we credit the account. So when we have to bring a liability to end we will have to Debit it . That means we have to Debit richard by certain amount.

We will pay cash to richard . Cash is an asset . When asset decreases , we have to credit it by certain amount.

We owed to richard Rs 5000

We had paid Rs 4950 to him in full settlement

That means we have received a discount of ( 5000- 4950 ) Rs 50 . This Rs 50 is our gain and according to rules of accounting we have to credit all incomes and gains . So we will have to credit discount received account  

richard A/C ….. Dr 5000

To cash A/c. 4950

To discount received A/C 50

(Being amount paid to creditor in full settlement)

I hope it helped .