Question

A business has the following transaction:

Date	Transaction
13/06/16	Sale of inventory on credit to AFM P/L. The GST inclusive amount of the invoice is 44000 and the terms are 2/10 n30
21/06/16	AFM P/L settles their account in full. The above transaction is the only invoice outstanding

All numerical answers are numbers which consist only of the digits 0 to 9. Symbols or punctuation marks should NOT be incorporated in answers.

With regard to the transaction of 21/6/16

Identify which journal the transaction will be recorded in: AnswerCash Receipts JournalCash Payments JournalSales JournalPurchases JournalGeneral Journal

What is the amount that AFM P/L will pay: Answer

Record the amount entered against Accounts Receivable: Answer

Is the Accounts Receivable entry a Debit or Credit: AnswerDebitCredit

What is the amount recorded in the net discount column (if any)? Answer

What is the amount recorded in the discount GST column (if any)? Answer

Answer 1

1. Transaction of 21/06/2016 i.e. AFM P/L settles the account in full.
Above transaction will be recorded in Cash Receipt Journal.
2. AFM P/L Will pay 43120
Amount Payable =	44000
Discount on Payable	880
=44000*2%
Amount to be paid	43120
3. Amount Recorded againts Receivable will be 44000.
4. Account receivable entry is a debit.
5. Amount recorded in Net discount column is 880.
6. Nothing is recorded in Discount GST Column.
Note-
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