BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -To record a payment from the buyer to the seller that involves a cash discount, debit the cash account for the amount paid, debit a sales discounts expense account for the amount of the discount, and credit the accounts receivable account for the full amount of the invoice being paid.

Detailed explanation-2: -While posting a journal entry for discount received “Discount Received Account” is credited. Discount received acts as a gain for the business and is shown on the credit side of a profit and loss account.

Detailed explanation-3: -A cash discount is a deduction allowed by the seller of goods or by the provider of services in order to motivate the customers to pay with in a specified time. This discount should definitely be recorded in the books of accounts as this involves accounting terms.

Detailed explanation-4: -Cash discounts refer to an incentive that a seller offers to a buyer in return for paying a bill before the scheduled due date. In a cash discount, the seller will usually reduce the amount that the buyer owes by either a small percentage or a set dollar amount.