Multiple choice

Geeta draws a bill on Seeta for Rs. 6,000 on 1st April 2010 for mutual accomodation for 3 months. Seeta accepted the bill. Geeta discounts the bill at 6% and remits one-third of the proceeds to Seeta. Which journal entry will be passed by Geeta for remitting the proceeds to Seeta?

  1. Geeta's A/c Dr 2,000
    To Cash A/c 1,970
    To Discount A/c 30
  2. Seeta's A/c Dr 6,000
    To Cash A/c 5,910
    To Discount A/c 90
  3. Seeta's A/c Dr 2,000
    To Cash A/c 1,970
    To Discount A/c 30

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 As mentioned earlier only 1/3 of Rs 6,000 is remitted. Seeta would be debited by Rs 2,000. Cash sent is Rs 1,970 ( 1/ 3 X 5,910 ) ,Discount debited is Rs 30 ( 1/ 3 X 90 )  So this entry is correct.

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