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Sold goods to gokul at a list price of 4000 Trade discount10%and cash discount5%. He paid the amount on the same day and availed the cash discount ? EduRev Class 11 Question

Sold goods to gokul at a list price of 4000 Trade discount10%and cash discount5%. He paid the amount on the same day and availed the cash discount ? EduRev Class 11 Question

percentage discount
offer discounts

Discount received is recorded as a reduction to Accounts Receivable on a company’s balance sheet. The marked price is the price of an article, which was printed on it, and it was decided by the manufacturer or the seller, without any price reduction. Selling price is the actual price, which is used to sell the article or objects. The price for which an article or object is sold after discounts in the marked price is called the selling price. Discount is always calculated only on the marked price. Solutions for Sold goods to gokul at a list price of 4000.

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While this looks obvious, a business does offer a kind of discount which is not at the time of selling but at a later stage. Now we know that if we subtract the discount amount from the list price we get the selling price. So, we will find the selling price when a 25% discount was given. Efiling Income Tax Returns is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources.

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There are a few discount calculation methods that lawyers use. To calculate the discount allowed, first determine the type of transaction and then use the appropriate method. The two most common types of transactions are open accounts and promissory notes.

Discounts received are typically offered at the time of purchase. Discounts allowed are often stated as a percentage of the original selling price. Consider that you are a clothing retailer and that you choose to make upfront purchases. The vendor might give you a discount in exchange. To further lower your costs, he might possibly give discounts on older items that he’s attempting to get rid of from his inventory. Q.3. In an automobile shop, a box of spare parts were sold for \(\,1222,\) after the discount of \(6\% .\) Then, find the listed price of the box of spare parts.

Double-entry bookkeeping is required for cash discounts. Both are further divided into trade and cash discounts. Discounts allowed are typically used to encourage timely payment and strengthen business relationships.

Discount received is a reduction in the purchase price of goods or services that is offered by the supplier to the buyer. Reduction from the original price, which would be equal to a 10% discount. When calculating discounts, it is important to consider both the original selling price and the final selling price in order to determine the true savings. It is a common practice to announce a discount on the marked price of an article so as to attract customers.

To encourage prompt payment, ABC offers an additional discount of 5% if the customer pays within 7 days. A discount allowed is a reduction in the selling price of goods or services that is offered by the seller to the buyer. The discount is always calculated on marked price or listed price. However, on the other hand, cash discounts are recorded in the books of accounts.

Difference Between Trade Discount and Cash Discount

This means that Gokul paid only 3420 instead of 3600, which is the net price of goods. In this case, Gokul paid the amount on the same day, so he was eligible for the cash discount. The cash discount is beneficial for both the seller and the buyer. The seller gets the payment on time, and the buyer gets a discount on the purchase price.

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How to Calculate the Discount Received?

A book seller paid Rs. 1530 for a parcel of 50 books on which he had been given a discount of 15%. A Salesman receives 4% commission on the sales up to Rs. 10,000 and 5% commission on the sales over Rs. 10,000. Find his total income on the sales of Rs. 35,000. Discounts allowed may be offered at any time during the sales process. If two items are sold at Rs X each, one at a loss of p % and the other at a gain of p %, then the two transactions have resulted in an overall loss of (p2/100) %. As the profit and loss questions are very common and integral part of competitive exams, you can remember the following profit loss formula to solve problems on profit and loss.

If the selling price of 9 fans is the same as the cost price of 11 fans, find the gain or loss percent. Any input tax credit attributable to the discount must be reversed by the buyer or recipient of the supply. True discount on a bill is Rs. 1,800 and banker’s discount is Rs. 1,887. If the bill is due 10 months hence, find the rate of interest. 20 copies of a book can be purchased for a certain sum payable at the end of 6 months and 21 copies for the same sum in ready cash.

In English & in Hindi are available as part of our courses for Class 11. Download more important topics, notes, lectures and mock test series for Class 11 Exam by signing up for free. Manufacturers often prepare product catalogues for wholesalers, retailers and other resellers. These product catalogues will contain the listed prices of the products.

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Sudha gets a salary of trade discount formula. 1500 per month and commission at 8% on the sales over Rs. 10,000. If she gets Rs. 4500 in a certain month, find the sales made by her in that month. I) Discount is established in terms of an agreement before supply.

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A bill of Rs. 4,000 drawn on 5th January 1998 for 8 months was discounted for Rs. 3,840 on a certain date. Fid the date on which it was discounted at 10% p.a. Ii) Discount is linked to a specific supply invoice. Before getting into the concept of the discount, let us understand the below points. Discounts are an important part of doing business, and when used correctly, they can provide a boost to both the top and bottom lines.

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  • The purpose of the discount allowed is to promote early payment by the buyer, which helps to improve the cash flow of the business.
  • The reduction in average collection period in turn will affect the investment in accounts receivable.
  • As discount is something, which will always reduce the marked price, its value should always be taken in negative only.

A reduction in the expense related to the transaction, or in a separate account that tracks discounts, is recorded when the buyer receives a discount. If the generated data is not used, it is frequently simpler to ignore a discount that was given. Discounts can also be used to encourage customers to make timely payments. In some cases, companies may offer discounts for early payments to receive a greater level of interest income.

If the cost price of two items are X, and one is sold at a loss of p % and the other at a profit of p %, then the two transactions have resulted in no loss or no gain. We all have personally experienced a discount which is an upfront reduction in selling price. While the business does offer such type of discount , there is another type which is popularly known as ‘Cash Discount’.

Keep these six key points in mind to make the most of your next discount promotion. Remark- When date of the bill is not given, grace days are not to be added. Net profits are affected as discount expenses are charged to profits. Generally, business practises 2 types of discount as shown in the below image. If the income for next month is increased by 20%, and the amount of savings remains the same, then find the percentage increase in expenditure of Radha.

There are other methods used for calculating discounts on different types of transactions, but these are the two most common. To calculate the discount allowed, simply use the appropriate method for the type of transaction involved. When a seller provides a discount to the buyer of goods or services, this particular discount is known as the discount received. Thus, a discount given on the jeans is equal to the difference between the jeans’ marked price and selling price.

cash flow

Here you can find the meaning of Sold goods to gokul at a list price of 4000. He paid the amount on the same day and availed the cash discount ? Defined & explained in the simplest way possible. Besides giving the explanation of Sold goods to gokul at a list price of 4000.

A four-wheeler dealer sales vehicle giving some discount (5% to 10%) to the customer. The dealer sales accessories to some customers on certain discount and to some customers, the dealer sells on 100% discount on separate invoice. Ad hoc discount given after supply is not eligible for deduction from ‘value‘ In case ,there is no pre fixed criteria, basis or rationale for arriving at the quantum of discounts.

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