A trade discount is: MCQ with Answer and Explanation

Question
A trade discount is:
A. Treated as a non-operating expense
B. Given for prompt payment
C. Recorded separately in the books of accounts
D. Deducted from the list price and not recorded in the books
Answer: Option D
Solution (By JKSSB Mock Tests)
Trade discount is a reduction from the catalogue price given for bulk purchases and is not recorded in the accounting books.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1
A: The Trial Balance is a statement, not an account. R: It is prepared to check the arithmetical accuracy of the ledger. Choose the correct option.
A. Both A and R are true and R is the correct explanation of A
B. A is true but R is false
C. A is false but R is true
D. Both A and R are true but R is NOT the correct explanation of A
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
The Trial Balance is indeed a statement of ledger balances, and its primary purpose is to check arithmetical accuracy. However, the fact that it is a statement does not explain why it checks accuracy; the double-entry system does.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Deduction under Section 80C' is available up to maximum of:
A. ₹2,00,000
B. ₹1,50,000
C. ₹1,00,000
D. ₹50,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Under Section 80C, maximum deduction is ₹1,50,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
A business purchased goods for Rs 50,000 on credit. What is the effect on the accounting equation?
A. Assets decrease, Liabilities decrease
B. Assets increase, Liabilities increase
C. Liabilities increase, Capital decreases
D. Assets increase, Capital increases
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Stock (Asset) increases by Rs 50,000 and Creditors (Liability) increase by Rs 50,000, maintaining the equation balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Explore All Accountancy and Book Keeping MCQs
Today's Top Topics
Accountancy and Book Keeping 1861 Statistics 1318
Explore Subjects
Accountancy and Statistics 3179 Economy GK 2220 English 15164 Computer 5279 Current Affairs 575
Practice Mix
Which of the following is an indirect tax in India?
The valve between the left atrium and left ventricle is the:
A person faces north. He turns 45° left, then 90° right, then 45° left. Which direction is he facing?
Under the Income Tax Act, the 'TDS' on the sale of an immovable property (other than agricultural land) by a resident is governed by which section, and what is the rate?
In 'Piecemeal Distribution' during dissolution, the first priority for payment of outside liabilities is: