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State whether the following statement is True or False with reasons: Trade discount account is a nominal account. - Book Keeping and Accountancy

MCQ
True or False

State whether the following statement is True or False with reasons:

Trade discount account is a nominal account.

Options

  • True

  • False

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Solution

This statement is False.
When a discount is allowed on catalogue price or list price, it is known as a Trade discount, which is a general discount to be allowed to every customer. From the accounting view point, it is not to be recorded in the books. So, we can say that the trade discount itself is not an account.
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APPEARS IN

Balbharati Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board
Chapter 2 Meaning and Fundamentals of Double Entry Book-Keeping
Exercise Q.4 | Q 9 | Page 40
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