Question

Purchase goods from Shriram of 40000 and trade discount is 10%

Answer 1

Answer:

PURCHASE A/C DR. 36000

TO SHRIRAM A/C. 36000

Answer 2

Journal entry

Explanation:

                                  Books of (----Limited)

                                      Journal Entry

Date         Account Title and Explanation       Debit   Credit

               Purchase                         A/c Dr.       36,000

                To Shriram       A/c                                         36,000                        

              (Being goods purchase from Shriram on discount)

Note: There will be no entry held for a trade discount.

Calculation of trade discount:

40,000 x 10% = 4,000

Amount of purchase = 40,000 - 4,000

Amount of purchase = 36,000

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