The cash discount allowed to a debtor should be credited to __________.

Discount account

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Customer account

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Sales account

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None of these

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Solution

The correct option is B Customer account
Cash discount is a discount which is allowed by the business to speed up the cash collection from customers. This is an expenses to the organization and to be recorded in profit & loss account.

Accounting entry will be as under:
Cash discount a/c Dr.
To Customer A/c

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Similar questions

Discount allowed to a debtor should be credited to ___.

In case of actual discount when provision for discount on debtors is made, the discount account is debited with a corresponding credit in _____account.

Q. While preparing final account, to make provision for discount on debtors. which of the following adjustment entry will be passed?

Provision for Discount on Debtors A/c To Debtors A/c	Dr.
Profit & Loss A/c To Provision for Discount on Debtors A/c	Dr.
Provision for Discount on Debtors A/c To Trading A/c	Dr.
Debtors A/c To provision for Discount on Debtors A/c	Dr.

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's trial balance contains the following information :
Discount allowed, Rs 1,000
Provision for discount, Rs. 3,000 on debtors
It is desired to make a provision for discount on debtors, Rs. 3,500. The amount to be debited to profit and loss a/c is____________.

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