PRC-1 · Chapter 3 · Question 36 of 100
When a business receives a settlement discount from a credit supplier, the individual discount amount is recorded in the memorandum column of the cash book. Where is this specific individual amount posted?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Debit side of the individual supplier's account in the Payables Ledger.
Explanation
A discount received reduces the amount the business owes to that specific supplier. To reflect this reduction in liability, the individual discount is debited to the supplier's account in the Payables Ledger.
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