Answer:

What is the journal entry for “cash paid to Mahesh Rs 7900 in the full settlement of his A/C 8000”?

A journal is a book which records all the business transactions.

Before recording any transaction it is important to know the GOLDEN RULES OF ACCOUNTS. If you already know it, you are a step ahead of others. For those who do not know, they are as FOLLOWS:

PERSONAL ACCOUNT:

Debit — Comes in

Credit —Goes out

REAL ACCOUNT

Debit— The receiver

Credit — The giver

NOMINAL ACCOUNT

Debit— All expenses and losses

Credit — All incomes and gains

Explanation of the transaction:

Let us predict that I am Mahesh and you are the purchaser. You PURCHASED a bundle of books from me worth 8000. But, as you purchased it on a larger scale I provided you with a discount of 100 RUPEES. So, you have to pay only 7900.

You identified it correct! In this case, we have three accounts:

1. Mahesh’s A/c (Personal A/c)
2. Cash A/c (Real A/c)
3. Discount RECEIVED A/c (Nominal A/c)

So according to the golden rules of accounts:

1. Mahesh is the receiver, hence, Mahesh’s account will be debited.
2. Your Cash is going out, hence, it will be credited.
3. And Discount Received is a GAIN for you, hence it will be credited.

So the journal entry is:

Mahesh A/c …………………………………Dr. ₹8000

To Cash A/c ………………………………………₹7900

To Discount Recieved A/c ………………………₹100

Hope you find this answer helpful!

Explanation:

thank you❤