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WAEC Financial Accounting 1992 Question 2

Question 2

Cash Book

In which of the following books will trade discount be recorded?

  1. A.Cash book
  2. B.General Ledger
  3. C.Purchases Day Book
  4. D.Invoices
  5. E.Journal Voucher.
Show the answer and explanation

Answer: C (Purchases Day Book)

Explanation

Trade discount is not posted to the ledger or cash book; it is shown on the invoice and the purchases day book records the purchase at list price less trade discount.