Question

what is the journal entry of purchased goods off list price of rupees 20000 from Vishal at 20% trade discount against cheque payment

Answer 1

It is known by all that the trade discount is not recorded in the books of accounts. The trade discount is deducted at the time of purchase only.

So, here the list price is 20000 and trade discount is 20% on the list price.

Hence, trade discount is 4000. Now the journal entry will be:

Purchase A/c…. Dr 16000

To Bank A/c 16000"