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Question

Trade discount allowed on the Sales, if appearing in the trial balance, is shown in the final accounts_____________________.
  1. On the debit side of the profit and loss account
  2. On the debit side of trading account
  3. By way of deduction from the sales in the trading account
  4. Credit of P & L A/c

A
On the debit side of trading account
B
Credit of P & L A/c
C
On the debit side of the profit and loss account
D
By way of deduction from the sales in the trading account
Solution
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Trade discount allowed on sales, if appearing in the trial balance, is shown in the final accounts by way of deduction from the sales in the trading account. Trade discount is a direct business expenditure hence, will appear in the trading account.

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