Cash discount allowed by the seller is accounted for as _____ by the buyer.

Purchase A/c Dr.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Cash book Dr.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Discount received A/c Cr.

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Drawing A/c Cr.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Discount received A/c Cr.
Discount are of two types, trade discount and cash discount. Cash discount is associated with the payment of cash. It is an indirect income to the buyer, hence credited in discount a/c.

Suggest Corrections

Similar questions

State whether the following statements are TRUE or FALSE :

1. Total of payments side can be greater than total of receipts side in case of bank column.
2. Purchase of asset or stationery on credit is recorded in purchase book.
3. When goods are returned by buyer to seller, buyer sends a debit note.
4. Cheque received and deposited into bank on the same day is a contra entry.
5. Simple petty cash book is not very popular.
6. Interest on overdraft charged by bank is recorded in the cash column.
7. It is not necessary to record dishonor of cheques in the cash book.
8. Cheque book facility is available for fixed deposit account.
9. Businessman generally operates savings bank account.
10. A cash book is both a journal as well as ledger.
11. Cash book is a book of original entry.
12. Cash discount allowed is recorded on the debit side of cash book
13. Credit transactions are never recorded in cash book.
14. Endorsed cheques are always recorded on the payment side in the bank column.
15. A person who endorses the cheque is known as endorser.

Enter the following transactions in a cash book with cash and bank and columns for the month of April, 2011:

2011 Apr.
1.	Started business with cash Rs 30,000.
2.	Opened a current account with bank and deposited Rs 9,000.
5.	Received Rs 4850 for cash sales and discount allowed Rs 50.
6.	Purchased goods of Rs 3,000 at 10% cash discount, half the amount was paid by cash and remaining by cheque.
9.	Received a crossed cheque for Rs 7,775 from Megha Associates and discount allowed Rs 25.
12.	Purchased machinery of Rs 13,300 and paid for installation Rs 700.
15.	Received a bearer cheque of Rs 737 from Rahul in settlement of his account Rs 800.
17.	Deposited into the bank Rs 2,000.
20.	Transferred Rs 8,000 from proprietor’s savings account to Current account.
22.	Received a bearer cheque from Vinod Rs 2,230.
24.	Deposited the cheque received from Vinod into the bank.
27.	Bank informed that cheque received from Vinod is dishonoured.
28.	Paid for printing bill book Rs 660.
30.	Withdrew from bank for office use Rs 1,000.

Q. Goods worth Rs 3000 were purchased on which the trader allowed Rs 200 as trade discount and 5% as cash discount if paid immediately. Purchase a/c will be debited by _____.

Record the following transactions in a journal.
(i) Received cash from Jaya for a bad debt written - Off last year Rs. 400.
(ii) Bought goods at the list price of Rs. 1,00,000 From Rani less 20% trade discount and 2% cash discount and paid 40% by cheque.
(iii) Sold goods ot Preeti at the list price of Rs. 2,00,000 less 20% trade discount and 2% cash discount and paid 50% by cheque.
(iv) Sold goods to Tanu for Rs.40,000, allowing her a trade discount of 5% and a cash discount of 10% she paid $\frac{1}{4} t h$ of the amount in cash at the time of purchase.

Q. Cash discount allowed to a debtor should be credited to the _________ account.

Join BYJU'S Learning Program

Cash discount allowed by the seller is accounted for as _____ by the buyer.

The correct option is C Discount received A/c Cr.Discount are of two types, trade discount and cash discount. Cash discount is associated with the payment of cash. It is an indirect income to the buyer, hence credited in discount a/c.

The correct option is C Discount received A/c Cr.
Discount are of two types, trade discount and cash discount. Cash discount is associated with the payment of cash. It is an indirect income to the buyer, hence credited in discount a/c.