What do you mean by discount? Explain the types of discount.
Asked by Topperlearning User | 14th Jun, 2016, 05:30: PM
When a reduction in the amount is allowed in order to encourage more purchase or to have an on time payment is referred to as discount. Discount are classified as:
- Trade discount: The discount which is allowed when purchases are made in large quantity is known as trade discount. It is allowed as deduction from the sale value and the sale is recorded at a new amount. This is called sale less trade discount.
- Cash discount: The discount which is allowed by the supplier for immediate payment or before the due date is known as cash discount. It is usually allowed as a percentage of the amount received.
Answered by | 14th Jun, 2016, 07:30: PM
- Define journal and journalising.
- Give the format of a journal and explain in detail.
- Explain bad debts in brief. Give an example.
- Write down the limitations of a journal.
- Is journal a book of original entry? Explain
- What are the steps involved in journalising?
- Rebello purchased from Rs.100 each on which he is given 20% Trade Discount. He is further given 2% Cash Discount as he made payment for the purchases immediately. Calculate the amount that Rebello will debit in purchases account. Pass necessary journal entries for the following transaction.
- Journalise the following transactions: Date Rs. 2016 March 31 Stock at the end of the year 40,000 Salaries due to staff 8,500 Sold goods to Mohan 20,000 Purchased goods from Radha 10,000 Withdrawn from bank for private use 1,000 Placed in fixed Deposit Account at bank by transfer from current account. 6,000 Goods given as charity 5,000
- Journalise the following transactions : 2016 Rs. May 2 Paid interest to Loan 4,000 May 3 Ramesh who owed Rs.3,000 has become insolvent. He pays 50 paise in rupee in full settlement May 4 A cheque received from Ranjan deposited into bank was returned dishonored 6,300 May 5 Wood used for making office furniture 5,000 May 21 Due from Rama are bad debts 600 May 25 Purchased building and issued cheque 4,300
Kindly Sign up for a personalised experience
- Ask Study Doubts
- Sample Papers
- Past Year Papers
- Textbook Solutions
Verify mobile number
Enter the OTP sent to your number