Question

Received from Amrit rs 50000 by cheque on account against dues of rs 60000

Answer 1

Total receivable = 60000

actual amount recieved by Cheque= 50000

Discount allowed= 60000-50000=10000

So the current transaction affects three accounts...

Discount allowed account(Discount allowed to an extent of 10000 ,Bank account(amount to an extent of 50000 is recieved in the form of Cheque), Amrit account(Amrit owes us money and he z paying back)...

Discount allowed account is a nominal account (coz its a loss to us ; all losses Gains income expenses come under nominal account)

Amrit account is a Personal account (as the name suggests)

Bank account is a real account.(Bank balance is an asset ; all assets and Liabilities come under Real account)

The Three golden rules of accounting are..

Personal account - Debit the receiver ,credit the giver

Real account - Debit what comes in ,credit what goes out

Nominal account - Debit All expenses and losses credit , All incomes and gains

Discount allowed and Bank accounts are to be debited..(expense ; money is comingin)

Amrit account should be credited (Amrit is giving/the giver)

So the Journal Entry will be...

Bank a/c Dr 50000

Discount Allowed a/c 10000

To Poonam a/c. 60000

(Being Amrit's s account settled)