Question

purchase goods from Harshita for 60,000 with 10% trade discount and 5% cash discount and paid 40% in cash and 30% by cheque journal entry​

Answer 1

Trade discount: It simply means a discount which is given to all and this discount should not be recorded in the books

Sales amount=50000

(Less) Trade discount@10%=5000.

Amount after trade discount =45000

Cash Discount @10%=4500

Amount after cash discount =40500

The Journal entry of the above transaction is:

Cash A/c Dr 8100

Bank A/c Dr 20250

Discount allowed A/c Dr 4500

Debtors A/c Dr 12150

To Sales A/c. 45000

(Being sale made with trade discount 5000 and cash discount 4500)

• Amount received through cheque @50%

40500×50% = 20250

• Amount received in cash @ 20%

40500×20%=8100

• Amount due to debtors @30%

40500×30% 12150