Page 151 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

The books of prime entry, discounts and sales tax

Example 2: Solution

Five per cent is deductible, so only $190 is paid (by cheque). The bank
account will be credited with $190, and the account of XY will be debited, thus
XY
Dr $ Cr $
01 Jan Purchases 200

The discount would then be recorded as:

Debit
Credit

And updated in the ledger account of XY as:

XY
Dr $ Cr $
07 Jan Bank 190 01 Jan Purchases 200

Illustrations and further practice

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