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The item discount received will appear on the
- a)Credit side of Balance sheet
- b)Debit side of Balance sheet
- c)Debit side of Profit and loss account
- d)Credit side of Profit and loss account
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
The item discount received will appear on thea)Credit side of Balance ...
Discount received will appear in profit & loss account statement credit side, discount received by the buyer when seller allow discount. Generally discount allowed by the supplier when transaction happened on credit basis, such as trade discount, early payment discounts and high volume purchase discounts.
Most Upvoted Answer
The item discount received will appear on thea)Credit side of Balance ...
Explanation:
Discount received is a reduction in the cost of goods or services sold to a customer. It is a type of income for the business and is shown in the profit and loss account. The correct answer is option 'D', which is the credit side of the profit and loss account.
Reasons:
There are two reasons why the discount received is credited to the profit and loss account:
1. It is a type of income: The discount received is a type of income for the business as it is a reduction in the cost of goods or services sold. The profit and loss account is the account that records all the incomes and expenses of the business. Therefore, the discount received is credited to the profit and loss account.
2. It increases the profit of the business: The discount received increases the profit of the business as it is a type of income. The profit and loss account shows the net profit or loss of the business. Therefore, the discount received is credited to the profit and loss account to increase the profit of the business.
Conclusion:
Discount received is a type of income for the business, and it is credited to the profit and loss account. The profit and loss account records all the incomes and expenses of the business, and it shows the net profit or loss of the business. Therefore, the discount received is credited to the profit and loss account to increase the profit of the business.
Discount received is a reduction in the cost of goods or services sold to a customer. It is a type of income for the business and is shown in the profit and loss account. The correct answer is option 'D', which is the credit side of the profit and loss account.
Reasons:
There are two reasons why the discount received is credited to the profit and loss account:
1. It is a type of income: The discount received is a type of income for the business as it is a reduction in the cost of goods or services sold. The profit and loss account is the account that records all the incomes and expenses of the business. Therefore, the discount received is credited to the profit and loss account.
2. It increases the profit of the business: The discount received increases the profit of the business as it is a type of income. The profit and loss account shows the net profit or loss of the business. Therefore, the discount received is credited to the profit and loss account to increase the profit of the business.
Conclusion:
Discount received is a type of income for the business, and it is credited to the profit and loss account. The profit and loss account records all the incomes and expenses of the business, and it shows the net profit or loss of the business. Therefore, the discount received is credited to the profit and loss account to increase the profit of the business.
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Community Answer
The item discount received will appear on thea)Credit side of Balance ...
As we know that all expenses appear in debit side and all incomes appear in credit side of the profit and loss ..A/C so .....option D is correct
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The item discount received will appear on thea)Credit side of Balance sheetb)Debit side of Balance sheetc)Debit side of Profit and loss accountd)Credit side of Profit and loss accountCorrect answer is option 'D'. Can you explain this answer?
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