Question
A company purchased goods worth ₹2,00,000. It availed a trade discount of 10% and cash discount of 2% (if paid within 10 days). The company paid within 7 days. What amount will be credited to the Cash Account?
Solution
Purchase after trade discount = ₹2,00,000 × 90% = ₹1,80,000. Cash discount = ₹1,80,000 × 2% = ₹3,600. Amount paid = ₹1,80,000 - ₹3,600 = ₹1,76,400.
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