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Types of Sales Promotion

Cash discount...

Question

Cash discount on sales is debited to .......

Sales A/c

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Debtors A/c

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Discount allowed A/c

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Profit and loss A/c

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Solution

The correct option is D Discount allowed A/c
Cash discount on sales is an expense for the business therefore, it is debited to discount allowed account.
The Journal Entry would be
Cash a/c Dr.
Discount Allowed a/c Dr.
To Sales a/c

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Similar questions

	₹
Opening Debtors	60,000
Closing Debtors	75,000
Discount allowed	4,400
Sales Return	12,000
Bad-Debts	5,600
Provision for Bad-Debts	3,800
B/R received from Debtors	16,000
B/R dishonoured	4,000
B/R discounted	10,000
Discounted bills dishonoured	3,000
Cash Sales	1,05,000
Cash received from Debtors (including ₹ 6,000 against a debt previously written off)	3,08,000
Cheques received from Debtors	32,000

35, 000

30, 000

20, 000

20 %

40, 000

1 %

	(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	$25, 000$

	(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	$2, 95, 000$

25 %

85, 000

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

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