Shazia runs a grocery retail business. She trades on credit with her suppliers. At the end of her financial year, her main supplier of goods awards Shazia a £1,000 discount on her purchases of goods during the year. Her main supplier asks her to claim this discount by deducting £1,000 from her next payment for goods supplied on credit. Which one of the following is the correct double entry to record this £1,000 discount in Shazia's books of account?

Question

Quizplus · Accepted Answer

The discount reduces the amount Shazia owes to her supplier, so trade payables are debited. The purchases account is credited to reflect the reduction in the cost of goods.

Shazia Runs a Grocery Retail Business