Question

purchased from amar goods of 15000 less 20% trade discount and 10% cash discount and paid him half amount due

Answer 1

Answer:

15000*20% = 3000 ( Trade discount)

12000*10% = 1200 ( Cash discount)

Journal entry in the books of seller

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Amar. a/c dr. 5400

cash. a/c dr. 5400

Disc. a/c dr. 1200

To sales. a/c. 12000

"Being goods sold to Amar at T.D. 20% and C. D. 10% and half of amt due was paid."

Explanation:

sale value shown in books = 12000

( goods value less trade discount is shown in books and the trade discount given is shown in NARRATION)

Cash discount is given at the time of payment and it is shown in books.

Note : The discount in journal entry is cash discount.