Is the cash discount recorded in the journal?

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Solution

Yes, cash discounts are recorded in journal entries. A performa of cash discount is given below:

Date

Particulars

Debit

Credit

xxxxx

Cash account ………………………………………………………….……………..Dr.

xxxxxx

Discount allowed ……………………………………………………………………Dr.

xxxxxx

To debtors account

xxxxxx

(Being cash received from debtors)

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what is the journal entry for " purchase goods for Rs 200000 less trade discount of 20% and 5% cash discount from ajay for cash and supplied them to shafi at list price less 10% trade discount"

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Date	Particulars	Debit	Credit
xxxxx	Cash account ………………………………………………………….……………..Dr.	xxxxxx
Discount allowed ……………………………………………………………………Dr.	xxxxxx
To debtors account	xxxxxx
(Being cash received from debtors)