Question

Purchase goods costing 100000 against cheque and availed discount of 3%

Answer 1

Given " Purchased goods costing 100000 against Cheque and availed discount of 3% "

We know that Trade Discount is not recorded in the books of accounts.. It is deducted from the list price of that product at the time of Purchase itself..and the net price is considered as the historical price of that product... However "Cash Discount" is recorded separately in the books of accounts..in the form of either Discount allowed account or Discount recieved account....


The Current Transaction affects three accounts....
Purchases a/c (nominal account/ expense) , Bank a/c (Real account/outgoing) , Discount recieved a/c (Nominal account/ income)

As Per the golden rules of accounting

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

Nominal account - Debit All expenses and losses, credit all incomes and Gains


So the Journal Entry will be


Purchases a/c Dr. 100000

To bank a/c 97000

To Discount recieved a/c 3000

(Being Goods Purchased by Cheque)

Answer 2

Answer:

Purchases A/C Dr. 100000

To bank A/C 97000

To Discount recieved A/C 3000

(Being Goods Purchased by Cheque)