PRC-1 · Chapter 2 · Question 13 of 100
A customer pays an invoice of Rs. 200,000 within the discount period and is allowed a 5% settlement discount. What amounts are recorded in the three-column cash book?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Bank: Rs. 190,000; Discount Allowed: Rs. 10,000
Explanation
The customer takes a 5% discount (Rs. 10,000) and pays the net amount (Rs. 190,000). The Rs. 190,000 is entered in the bank column, and the Rs. 10,000 is entered in the discount allowed column on the receipt side.
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