A-LevelAccountingThe accounting cycle9706/12 · Oct/Nov 2023 · Q31 Mark

Maria recorded a cheque for $475 received from Josh, a credit customer. Josh had deducted a 5% cash discount. The cheque has now been returned as dishonoured. What is the correct entry to record the return of the cheque in Maria's books?

Adebit: bank $475, discount received $25; credit: Josh $500

Bdebit: Josh $500; credit: bank $475, discount received $25

Cdebit: bank $475, discount allowed $25; credit: Josh $500

Ddebit: Josh $500; credit: bank $475, discount allowed $25

✓ Correct answer

D: debit: Josh $500; credit: bank $475, discount allowed $25

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Topic: The accounting cycle, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2023 Paper 1 Variant 2, question 3.

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