Discount received is recorded on which of the following side of a cash book?
A. Receipts
B. Payments
C. Income
D. Expenditure
Answer: Option B
Solution(By Examveda Team)
Discount Received is a column found on the credit side of the Cash Book. When a creditor is paid and the business receives a discount the discount received and is recorded in the discount received column and the corresponding entry appears as a debit in the creditor’s account.This Question Belongs to Commerce >> Accounting
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Discount Received is an income for the concern so debit side of the cash book or receipts side in the cash book. In This income the company is not going to receive but instead of cash payment the company get Discount so it's not option B
Discount received means income
It Is Option A Only Because The Entry For Discount Received Is Cash a/c Record In Debit Side and Discount a/c Record In Credit Side. So In Cash Book When Cash Will Increase Then It Will Record On Receipts Side i.e. Debit Side of Cash Book.
When we are making payment to creditor we received Discount Received now look for journal Entry
Creditor A/c Dr
To Cash A/c
To Discount Received A/c
Explanation:
Dear if we observe cash book along with Dis count Column there are two side Receipt Side And Payment Side on Receipt Side there is a Column of Discount Allowed And On Payment side their is a column of Dis received.
Sir, Is A is not a correct answer
how discount received is an income of the business.
Cash discount received entry is
CashA/c Dr
To Discount received A/c
Answer A is correct
Debit side of cash book