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Standard XI

Accountancy

Cash Discount & Trade Discount

A discount gi...

Question

A discount given at the time of sale as a deduction from the selling price is called as .

cash discount

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trade discount

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credit discount

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discount received

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Solution

The correct option is B trade discount
Trade discount is a discount given at the time of sale as a deduction from the selling price. It is not accounted in the books of account.

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Similar questions

Q. Amount of discount deducted from invoice price is called a __________.

Q. A shopkeeper reduces the price of his goods by

50

% at the time of sale. Initially the price was fixed to get a profit of

20

% on selling price after allowing

15

% cash discount. His approx % of profit or loss?

Q. Question : From the following information ascertain the opening balance of sundry debtors and closing balance of sundry debtors and closing balance of sundry creditors

	(Rs)
Opening stock	$30, 000$
Closing stock	$25, 000$
Opening creditors	$50, 000$
Closing debtors	$75, 000$
Discount allowed by creditors	$1, 500$
Discount allowed to customers	$2, 500$
Cash paid to creditors	$1, 35, 000$
Bills payable accepted during the period	$30, 000$
Bills receivable received during the period	$75, 000$
Cash received from customers	$2, 20, 000$
Bill receivable dishonored	$3, 500$
Purchases	$2, 95, 000$

The rate of gross profit is

25 %

on selling price and out of the total sales Rs

85, 000

was for cash sales.
( Hint Total sales =

4, 00, 000 = 3, 00, 000 \times \frac{100}{75}

)

uFollowing was the position of Harish & Co. as on 1st April, 2017 :−

Cash in Hand ₹ 10,000; Cash at Bank ₹ 16,800; Furniture ₹ 8,000; Stock ₹ 50,000; Debtors− Ram ₹ 8,000; Shyam ₹ 12,000; Creditors− Anil ₹ 4,000; Sunil ₹ 5,000.

Following transactions took place during April, 2017 :−

2017
April 2		Received a cheque from Ram in full settlement of his account after deducting 5% cash discount.
4		Deposited the above cheque into Bank.
5		Goods purchased for ₹ 20,000 at 10% trade discount and 5% cash discount. Payment made by cheque.
6		Received a cheque from Shyam for ₹ 3,860 and discount allowed to him ₹ 140. Cheque deposited into the bank on the same day.
10		Cash paid to Anil after deducting 2% cash discount.
15		Old furniture sold for ₹ 800.
16		Sold goods to Shiv Parshad of the list price of ₹ 10,000 at a trade discount of 15%.
18		Shiv Parshad returned goods of the list price of ₹ 1,000.
20		Paid for furniture repairs to Bahadur Singh ₹ 100.
25		Received a cheque from Shiv Parshad after deducting 4% cash discount. Cheque was deposited into bank.
28		Bank charged ₹ 50 for 'Bank Charges'.
30		Received Commission ₹ 200.

Q. Question : From the details given below, find out the credit sales and total sales.

	(Rs)
Opening Debtors	$45, 000$
Closing Debtors	$56, 000$
Discount allowed	$2, 500$
Sales returns	$8, 500$
Irrecoverable Amount	$4, 000$
Bills receivables received	$12, 000$
Bills receivable dishonoured	$3, 000$
Cheque dishonoured	$7, 700$
Cash Sales	$80, 000$
Cash received from Debtors	$2, 30, 000$
Cheque received from Debtors	$25, 000$

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A discount given at the time of sale as a deduction from the selling price is called as .

The correct option is B trade discountTrade discount is a discount given at the time of sale as a deduction from the selling price. It is not accounted in the books of account.

The correct option is B trade discount
Trade discount is a discount given at the time of sale as a deduction from the selling price. It is not accounted in the books of account.