I would like to ask the question that appears in FA1 specimen exam.
The following statements relate to the sales ledger control account:
Which of the above statements are correct ?
A. Neither 1 nor 2
B. Both 1 and 2
C. 1 only
D. 2 only
Answer provided is A
Why Statement 1 is not correct ? Isn't that trade discount will not be recorded in the sales ledger control account ?
Seeking for advice.
Hi, yes Trade Discounts are DEDUCTED from the List Price in the INVOICE.
In the Receivable Ledger Control A/c we record the Net Amount, that can be found as
List Price 10000
Trade Discount (1000)
Net Amount 9000 (Amount shown in R.L.C.A)
Hope this clears up the confusion.