Question

Cash discount allowed is recorded on the debit side of cash book.

• A. True
• B. False

Answer 1

The correct option is B False

Explanation:

Discount allowed by a seller is a loss, since he is receiving lesser amount than what he could have received without allowing discount.

Hence, at the time of receiving the payment, discount allowed is recorded in the 'Discount' column on the debit side (or receipts side) of the Double Column Cash Book (with cash and discount columns).

This statement also holds valid in case of Triple Column Cash Book (with cash, discount and bank columns).