Question

received rs 14800 from A in full and final settlement of his account

Answer 1

Received full and final settlement of his account...


It means that sometimes directly discount is given in the transaction but sometimes the word full and final settlement is written it alsi means discount but discount amount is not given.... But

The journal entry will be...

Cash a/c... Dr.. 14,800

Discount a/c... Dr.. 200

.... To A a/ c.......... .......... 15,000.

[ being cash received at discount.] ¶¶

CASH ACCOUNT AND BANK ACCOUNT IS DEBITED TO BUSINESS BECAUSE BOTH ARE COME IN AND AGAINST TO A IT WILL BE THE CREDITED. THATS WHY A ACCOUNT IS CREDITED FOR BUSINESS..

Answer 2

The current transaction affects three accounts...

Discount allowed account(Discount allowed to an extent of xxx,Bank/cash account(amount to an extent of 14800 is recieved in the form of Cheque/cash) A account(A owes us money and she/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)

Poonam 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/cash accounts are to be debited..(expense ; money is comingin)

A's account should be credited (poonam is giving/the giver)

So the Journal Entry will be...

cash/Bank a/c Dr 14800

Discount Allowed a/c xxxx

To A a/c. xxxx

(Being A's account settled)