Question

Paid to gauri shankar 95000 by cheque after deducting 5% cash discount

Answer 1

Hey.. (^_-)

⭐Gauri shankar.. Dr. 90250

⭐⭐⭐⭐To discount received a/c... 4750

⭐⭐⭐⭐To cash a/c.. 95,000

[being cash paid on discount..]


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If there is trade discount is written in transaction then amount will be deducted but discount word not shown in books of accounts.. Its against cash discount is always recorded in books of accounts... Hence its also recorded in above entry....

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⭐ Business paid cash hence business is creditor for shankar so credit nature is Liability and hence recorded on credited side with discount as discount is received by business also credited ie benefits for business in paying cash...

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(^_-)

Answer 2

Journal entry will be-

Gauri Shankar D/R 95,000

             To discount received A/C4750

               To cash A/C 90,250

(Being discount received and payment made)

• Even if the money will be subtracted if a trade discount is noted in the transaction, it won't appear in the books of accounts.
• The discount for cash is always noted in the books of accounts. Therefore, it is also noted in the previous entry.
• Business paid in cash, making it clear that it is a creditor of Shankar.
• As a result, the credit is a liability, which is why it is recorded on the credited side with a discount because the business also earned a credit for the discount benefits for the business in paying in cash.

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