Question

State whether the following statements are true or false :

Cash discount is not recorded in the books of accounts.

Answer 1

False

Explanation:
This statement is false because cash discount, being an expense for the business, is always recorded in the books of accounts. It refers to the discount that is given to the customers for making instant payments or payments within a specified period of time. It is an expense to the business and is debited under the Profit and Loss Account. It is ascertained after deducting the trade discount which is not recorded in the books of accounts.