Sundry Creditors amounted to ₹5,000. These were paid at a discount of 5%. Realisation account will be debited by what amount?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹4,750.
Creditors = 5,000
Discount = 5%
Discount amount = 5,000 x 5/100
= 250
Paid amount to creditors = 5,000 - 250
= 4,750
For payment of liabilities:
Realisation A/c Dr. 4,750
To Bank A/c 4,750