On goods purchases of Rs.2,00,000 got trade discount of
20,000 from supplier, and the amounts paid to supplier is
1,00,000 in cash and RS.1,00,000 in check on the same day,
what would be the general ledger entry ?

Answers were Sorted based on User's Feedback



On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / sujit adak

Purchase A/C .........dr 200000
To cash .........................80000
To Bank..........................100000
To Discount received.............20000

Is This Answer Correct ?    33 Yes 9 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / h.r. sreepada bhagi

Since Rs. 20000/- trade discount is given and payment made
to the supplier is Rs. 2 Lac. (Cash 1Lac.+Cheque 1Lac.)
From this we can imply that the original value of the goods
was Rs. 2.20 Lac., & has been supplied for Rs. 2 Lac. after
trade discount of Rs. 20000/-.

Trade discount need not be accounted separately. (Only cCash
discount received/given needs to be accounted separately as
income/expense, as the case may be.

In this case On Purchase, debit Purchases A/c with Rs. 2
Lac., & Credit the Supplier.
On payment, debit the supplier with Rs. 2 Lacs. & Credit
Cash & Bank A/cs with Rs. 1 Lac., each.

Is This Answer Correct ?    23 Yes 1 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / mohamed ashir

Trade Discount Will not come in the books account ,but cash
discount will come in the books of accounts .
so here is trade discount...........

Purchse a/c dr 200000
To Cash 100000
To Bank 100000

Is This Answer Correct ?    5 Yes 0 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / gouthami

there is no entry for trade discount, only cash discounts
are taken into consideration.

Is This Answer Correct ?    3 Yes 1 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / murli vohra

People Giving the answer above are forgetting one thing that Trade Discount is not to be shown in book of accounts

Entry will be
Purchase Dr-180000
Supplier -Dr20000(bal figure)
To cash 100000
To Bank 100000

Is This Answer Correct ?    4 Yes 3 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / ramesh.ch

1.trade discount which is allowed to customers to increase
the sales
2.trade discount will not effect the expected profit
3. trade discount should not will effect the books of
account

purchase A/c........Dr 1,80,000

To cashA/c 80,000
To bankA/c 1,00,000

Is This Answer Correct ?    1 Yes 0 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / bhavani

Purchases A/c Dr 2,00,000.00
To Cash A/c 80,000.00
To Discount A/c 20,000.00
To Bank A/c 1,00,000.00

Is This Answer Correct ?    9 Yes 9 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / gangadhar

Purchase A/c Dr. 200000
Supplier A/c Dr. 20000
to cash A/c 100000
to bank A/c 100000
to discount received A/c 20000

Is This Answer Correct ?    2 Yes 2 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / govardhan prasad.g.

Purchases A/c DR 2,00,000
TO CASH A/C 1,00,000
TO BANK A/C 1,00,000

For this transaction we are considering trade disc of
20,000 from suppliers,bec trade disc is not enteried in
Trading and P&L account.(i.e., total value of goods is
2,20,000 in that trade disc is 20,000 given by supplier and
remaining 2,00,000 given by the purchaser.)

Is This Answer Correct ?    0 Yes 0 No

On goods purchases of Rs.2,00,000 got trade discount of 20,000 from supplier, and the amounts paid..

Answer / mohd rashid

NO NEED TO ACCOUNTING OF TRADE DISCOUNT. THEREFORE ENTRY WILL BE


PURCHASE A/C DR 200000
TO CASH A/C 100000
TO BANK A/C 100000

Is This Answer Correct ?    0 Yes 0 No

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