Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 11 - No. 9)
1.1 The following is the journal entry that reflects the cash discount on the purchase of inventory, what is the impact on the Discount Allowed account?
Debit the account with the amount paid with the trade receivable
Credit the account with the amount that is paid with the trade receivable
Debit the account with the amount of the cash discount
Credit the account with the amount of the cash discount
Explanation
The Discount Allowed account is credited with the amount of the cash discount.
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