Trade discount allowed at the time of sale of goods is ________________.

Recorded in Journal

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Not recorded on books of accounts

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Recorded in cash book

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None of these

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Solution

The correct option is C Not recorded on books of accounts
A trade discount is the reduction granted by a supplier of goods/services on the list or catalog prices of the goods supplied. ... Trade discount is not separately shown in the books of accounts, and all amounts recorded in a purchases or sales book are done in the net amount only.

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Similar questions

Record the following transactions in a journal.
(i) Received cash from Jaya for a bad debt written - Off last year Rs. 400.
(ii) Bought goods at the list price of Rs. 1,00,000 From Rani less 20% trade discount and 2% cash discount and paid 40% by cheque.
(iii) Sold goods ot Preeti at the list price of Rs. 2,00,000 less 20% trade discount and 2% cash discount and paid 50% by cheque.
(iv) Sold goods to Tanu for Rs.40,000, allowing her a trade discount of 5% and a cash discount of 10% she paid $\frac{1}{4} t h$ of the amount in cash at the time of purchase.

State whether the following statements are TRUE or FALSE :

1. Total of payments side can be greater than total of receipts side in case of bank column.
2. Purchase of asset or stationery on credit is recorded in purchase book.
3. When goods are returned by buyer to seller, buyer sends a debit note.
4. Cheque received and deposited into bank on the same day is a contra entry.
5. Simple petty cash book is not very popular.
6. Interest on overdraft charged by bank is recorded in the cash column.
7. It is not necessary to record dishonor of cheques in the cash book.
8. Cheque book facility is available for fixed deposit account.
9. Businessman generally operates savings bank account.
10. A cash book is both a journal as well as ledger.
11. Cash book is a book of original entry.
12. Cash discount allowed is recorded on the debit side of cash book
13. Credit transactions are never recorded in cash book.
14. Endorsed cheques are always recorded on the payment side in the bank column.
15. A person who endorses the cheque is known as endorser.

Q. Cash sales of trading goods is initially recorded in ________.

Give journal entries to rectify the following errors assuming that suspense account had been opened.

(a)	Goods distributed as free sample Rs 5,000 were not recorded in the books.
(b)	Goods withdrawn for personal use by the proprietor Rs 2,000 were not recorded in the books.
(c)	Bill receivable received from a debtor Rs 6,000 was not posted to his account.
(d)	Total of Returns inwards book Rs 1,200 was posted to Returns outwards account.
(e)	Discount allowed to Reema Rs 700 on receiving cash from her was recorded in the books as Rs 70.

Q. The discount column of a triple column cash book records __________.

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