Question

Purchased goods of 80,000 2 po
at 10% Trade Discount and 5%
Cash Discount from Akshay
and 1/3rd amount paid by
cheque. Calculate the amount
paid.​

Answer 1

Answer:

Firstly, note that all types of discounts on purchases (e.g trade discount, cash discounts, rebates, etc) are treated as indirect revenue (debit for decrease & credit for increase).

Trade Discount: 20% of 10,000 = Rs. 2,000

First scenario: Cash/Cheque Purchase.

In this case, the journal entry will be as follows:

Dr. Purchases Account(purchase of goods alc) Rs. 10,0000

Cr Trade Discount Account Rs. 2,000

Cr Cash/Bank Account Rs. 8,000