In which book of account is cash discount received first recorded?

X sells goods with a list price of $5000 to a credit customer. The customer is allowed a 5% trade discount and a further 2.5% cash discount if payment is within 20 days of the invoice date.

What amount should be credited to the Sales account of X?

Which should be recorded in the general journal?

Which account could have a credit balance?

X keeps a full set of books of account. Where will the Sales account appear?

X buys goods on credit from Y, who issues an invoice. The goods are unsuitable and X returnsthem to Y without paying for them.

Which document should Y issue to X on receipt of the returned goods?

A business purchases goods on credit for $800, less 25 % trade discount, with a cash discount of 5 % if payment is received in full within 28 days.

How much will the business pay if it settles within 28 days?

A retailer bought 20 items from a manufacturer at list price of $20 each, subject to 20 % trade discount. The retailer later returned ten of the items.

How much is entered in the Sales Returns Journal of the manufacturer?

The totals of the discount columns in a trader’s Cash Book were as follows.

$200 debit

$150 credit

What entry will the trader make in the Discount Allowed account?