O-LevelAccountingSources and recording of data7707/11 · Oct/Nov 2017 · Q61 Mark

Ali sold goods, $600, on credit to Malik on 19 October. The terms of the sale were 2¹⁄₂% cash discount if payment was received within 14 days. Payment was received on 25 October. How would Ali record this discount?

Adebit discount allowed, credit Malik

Bdebit discount received, credit Malik

Cdebit Malik, credit discount allowed

Ddebit Malik, credit discount received

✓ Correct answer

A: debit discount allowed, credit Malik

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Topic: Sources and recording of data, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2017 Paper 1 Variant 1, question 6.

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