Discount allowed is a kind of deduction from _________.

Account payable

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Account receivable

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Cash account

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Discount account

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Solution

The correct option is B Account receivable
Discount allowed is a concession that is given to the customers in respect of the amount receivable from them for the sales done. When a discount is given, it reduces the total receivable amount to the extent of discount amount.

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

Q. A shopkeeper allows a discount of

10 %

on his goods. For cash payments, he further allows a discount of

20 %

. Find a single discount equivalent of the above offer

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

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. The provisions for bad debts and provision for cash discounts which appear as a deduction from sundry debtors in the balance sheet is due to the application of _________.

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Discount allowed is a kind of deduction from _________.

The correct option is B Account receivableDiscount allowed is a concession that is given to the customers in respect of the amount receivable from them for the sales done. When a discount is given, it reduces the total receivable amount to the extent of discount amount.

The correct option is B Account receivable
Discount allowed is a concession that is given to the customers in respect of the amount receivable from them for the sales done. When a discount is given, it reduces the total receivable amount to the extent of discount amount.