Which of the following entries is correct in respect of reserve for discounts on accounts payable?

A. Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c
B. Debit Accounts Payable A/c and Credit P&L A/c
C. Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c
D. Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c

The entry will be as follows:
Reserve for Discount on Creditors A/c……………………………………………… Dr.
To Profit & Loss A/c
It will be shown on the credit side as a separate item and will be shown on the Liabilities side by way of deduction from the Sundry Creditors.

Related Mcqs:

The drawer of a trade bill passes relevant entries with regard to the transaction involved in it. But, in case of an accommodation bill, he passes an entry in addition to the usual entries. The additional entry so passed is with respect to
A. Discounting of the bill with the bank
B. Payment of the bill on due date
C. Remitting or receiving the amount
D. Sending the bill to bank for collection
A chart of accounts generally start with which of the following types of accounts?
A. Assets accounts
B. liability accounts
C. Cash accounts
D. Revenue accounts
The real accounts are accounts of Assets, liabilities and ___________?
A. Expenses
B. Revenues
C. Capital
D. Drawing
The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is
A. The Trial Balance will not agree
B. The balance of creditors is understated
C. The purchases are understated
D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book
Which of the following is true regarding closing entries?
A. They must be followed by reversing entries
B. They transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account
C. They must be made after the reversing entries but before the adjusting entries
D. They must be made after the adjusting entries but before the reversing entries
Keeping the log of financial information in books of original entries is called__________?
A. Recording
B. summarizing
C. Grouping
D. Processing
Transferring entries from journal to ledger account is commonly known as____________?
A. Recording
B. Transferring
C. Posting
D. Entry making
General journal is a book of _______ entries?
A. First
B. Original
C. Secondary
D. Generic
Closing entries are generally passed:
A. At the time of opening new books of account
B. At the time of closing the accounts
C. During the course of accounting period any time
D. After certification of accounts
A Bill of Exchange is drawn on 1st April, 2018 payable after 3 months. The due date of the bill is?
A. 30th June,2018
B. 1st July,2018
C. 4th July,2018
D. 4th August,2018