Question

purchased good at invoice value of rs 10000 on 20 % trade discount and 5 % cash discount from bhupendrs .​

Answer 1

Answer:

Purchase A/c DR 7,600

Discount A/c DR. 400

TO Bhupendr's A/c. 8,000

Explanation:

Here the creditors name is mentioned instead of cash so we assume that this is a credit purchase.

First we have to less the trade discount but trade discount will not be mentioned in journal entry. Then we got 8000. Now from 8000 we will deduct the cash discount.

10000 × 20% = 2000

10000 - 8000 ( trade discount)

8000 × 5% = 400 (cash discount)

8000 - 400 = 7600 (purchase amount)