Question

Paid to Raj by cheque 9500
And discount allowed by him 500

Answer 1

Discount allowed is the loss of business but there is big strategy of long term gain. If any customer will pay us in cash at this time or before the time when he will actually pay for his goods bought goods on credit, then, we will allow discount. With this, we can get our cash from debtors fastly. Secondly, it will help to increase working capital for day to day expenses. So, many organisations have clear policy to allow discount.


Discount allowed  is deduction from purchase price of customer, if he pay within time or before time. In other words, it is encourage to buyer for buying with cash rather than buying on credit.

Answer 2

Then what to do
please complete the questions
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