Question

Purchased from kareem goods of list price of rs6000 subject to 10% trade discount by cash journal entry

Answer 1

Answer:

purchases a/c Dr. 5400

To cash a/c 5400

(being goods purchased )

Answer 2

Journal Entries in the books of buyer

Purchase A/C DR 5,400

                To Cash A/C 5,400

( Being goods purchased )

Note - Trade discount is not recorded in the books of account . Purchase is debited as it is our asset and when asset increases it is debited and for purchasing goods we are giving cash and it is also our asset and it is decreasing and it will be credited.

Journal Entries in the books of Kareem

Cash A/C DR  5,400

                 To Sales  A/C 5,400

( Being goods sold )

Note - Trade discount is not recorded in the books of account. Cash is debited as it is our asset and it is increasing and it will be debited and goods are also our asset but it is decreasing as we are selling it so it will be credited.