3 Marks Question

Question 13 Marks

What is the difference between trade discounts and cash discounts?

Answer

Difference between Trade and Cash Discount
Basis of Difference	Trade Discount	Cash Discount
Meaning	It is allowed when goods are purchased or sold.	It is allowed at the time of payment.
Recording in books	It is recorded in invoice/bill but not in the books of accounts	It is recorded in the Journal Proper book and not in Cash Book.
Purpose	It is allowed to increase sale of business.	It is allowed for earlier payment from customer or party.
Deduction	It is deducted from the price-list of the goods.	It is not deducted from the price-list of the goods.

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Question 23 Marks

R & Co. paid professional fee to Ram, an advocate. If applicable rate of CGST and SGST is $6 \%$ each, pass the Journal entry for payment of CGST and SGST.

Answer

Particulars		Dr.(₹)	Cr.(₹)
Legal fee A/c	Dr.
Input CGST A/c	Dr.
Input SGST A/c	Dr.
To Cash A/c

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Question 33 Marks

Anish of Gurugram, Haryana sold goods of ₹ 20,000 to Prakash of Noida, Uttar Pradesh. Rates of CGST and SGST are $6\%$ each while that of IGST is $12 \%$. Pass the Journal entry in the books of Prakash.

Answer

Particulars		Dr. (₹)	Cr. (₹)
Purchase A/c	Dr.	20,000
Input IGST A/c	Dr.	2,400
To Anish's A/c (Goods purchased from Anish on credit)			22400

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Question 43 Marks

Ramesh purchased on credit goods for ₹ $5,00,000$ Less $20 \%$ Trade Discount. As per the terms, he can deduct $4\%$ Cash Discount if he pays the full amount within 15 days. What amount he will have to pay to avail the Cash Discount?

Answer

	₹
Purchase Amount	5,00,000
Less: Trade Discount @ 20%	1,00,000
Net purchase	4,00,000
Less: Cash Discount @ 4% on ₹ 4,00,000	(16,000)
Amount to be paid	3,84,000

Cash discount is shown in books and is availed if condition fulfills.

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Question 53 Marks

When an account is said to have a debit balance and credit balance?

Answer

The difference between the sum of the two sides of an account is called the balance. This is the most important part of an account as it shows value or position of asset, liability, capital, income orexpenses of which the account is a record. If the total of the debit side exceeds the total of credit side then this would be represented by a debit balance and opposite is true for a credit balance .

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