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ZIMSEC O Level Principles of Accounts Notes: The Cash Book:Discount Allowed and Discount Received entries
- Consider the following entries and enter them into the books of J Haudzwi
July 20×9
1 Started the business with $1000 Cash
3 Deposited $600 from the cash at hand into the bank
10 Bought goods on Credit from J Mafana for $360
15 Sold Goods on Credit to S Mutiro $500
22 Made Cash Purchases for goods worth $200
28 Paid J Mafana $324 by Cheque and received 10% discount
30 Received $475 Cash from S Mutiro in full settlement of the amount owed by him
NB These are the only transactions that took place during the month of July
Solution
| Cash Book | |||||||
| Details | Discount Allowed | Cash | Bank | Details | Discount Received | Cash | Bank |
| $ | $ | $ | $ | $ | $ | ||
| Capital | 1000 | Bank | 600 | ||||
| Cash | 600 | Purchases | 200 | ||||
| S Mutiro | 25 | 475 | J Mafana | 36 | 324 | ||
| Balance c/d | 675 | 276 | |||||
25 | 1475 | 600 | 36 | 1475 | 600 |
||
| Sales Ledger | |||||||
| S Mutiro Account | |||||||
| Date | Details | Amount | Date | Details | Amount | ||
| $ | $ | ||||||
| 30 July | Sales | 500 | July 15 | Cash | 475 | ||
| July 30 | Discount Allowed | 25 | |||||
500 | 500 | ||||||
| Purchases Ledger | |||||||
| J Mafana Account | |||||||
| Date | Details | Amount | Date | Details | Amount | ||
| $ | $ | ||||||
| July 28 | Bank | 324 | July 10 | Purchases | 360 | ||
| July 28 | Discount Received | 36 | |||||
360 | 360 | ||||||
| General Ledger | |||||||
| Purchases Account | |||||||
| Date | Details | Amount | Date | Details | Amount | ||
| $ | $ | ||||||
| July 10 | J Mafana | 360 | Balance c/d | 560 | |||
| July 22 | Cash | 200 | |||||
560 | 560 | ||||||
| Sales Account | |||||||
| Date | Details | Amount | Date | Details | Amount | ||
| $ | $ | ||||||
| July 31 | Balance c/d | 500 | July 15 | S Mutiro | 500 | ||
| Discount Received Account Account | |||||||
| Date | Details | Amount | Date | Details | Amount | ||
| $ | $ | ||||||
| July 31 | Balance c/d | 36 | July 31 | Total for the month | 36 | ||
| Discount Allowed Account Account | |||||||
| Date | Details | Amount | Date | Details | Amount | ||
| $ | $ | ||||||
| July 31 | Total for the month | 25 | July 31 | Balance c/d | 25 |
NB We have omitted the date column in the Cash Book so that it can fit in most browsers more easily. You should include it in your own answers
To access more topics go to the Principles of Accounts Notes.
