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JAMB Principles of Accounts 1998 Question 10

Question 10

Cash Book

The total of the discounts received column in the cash book is posted to the

  1. A.credit of the discounts received account
  2. B.debit of the discounts received account
  3. C.credit of the discounts allowed account
  4. D.debit of the discounts allowed account.
Show the answer and explanation

Answer: A (credit of the discounts received account)

Explanation

Discount received is a gain, so its total is credited to the discount received account (the suppliers' accounts are debited).