PRC-1 · Chapter 3 · Question 99 of 100
If the business pays a supplier Rs. 9,500 and receives a Rs. 500 settlement discount, what amounts are posted to the supplier's individual ledger account?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Rs. 10,000 (Rs. 9,500 cash + Rs. 500 discount)
Explanation
Both the cash paid and the discount received reduce the liability owed to the supplier. Therefore, the supplier's account is debited with the total settled amount of Rs. 10,000.
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