Question

Purchase goods worth 150000 from Prashant and co., less 10% trade discount journal entry

Answer 1

Answer:

Purchases A/c_Dr (45,000)

Input CGST A/c_Dr (2,700)

Input SGST A/c_Dr (2,700)

To Mahesh's A/c (25,200)

To Cash A/c (24,075)

To Discount Received A/c (1,125)

(Being goods purchased from Mahesh at 10% trade discount plus CGST and SGST @ 6% each, half of the amount paid and discount received @ 5% )

Reason : Purchases Account is debited because it increases the balance of Purchases(Expenses) Account, Input CGST Account is debited because it increases the balance of Input CGST(Assets) Account, Input SGST Account is debited because it increases the balance of Input SGST(Assets) Account.

Mahesh(Creditor) Account is credited because it decreases the balance of Creditors (Liability) Account, Cash Account is credited because it decreases the balance of Cash(Assets) Account, Discount Received(Gain)Account is credited because it increases the balance of Discount Received(Income) Account.

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Explanation:

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