Paid ₹ 96,000 in full settlement of ₹ 1,00,000 due to the creditor Viji. Pass Journal entry.

Question 27 of 31

Q. Paid ₹ 96,000 in full settlement of ₹ 1,00,000 due to the creditor Viji. Pass Journal entry.

Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2025Subjective· 2mImportance★★★★★

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The creditor Viji's account is debited with the full ₹1,00,000, Cash is credited ₹96,000, and Discount Received (a gain) is credited ₹4,000.

Viji is a creditor owed ₹1,00,000. Paying only ₹96,000 in full settlement means the business enjoys a cash discount of ₹4,000 (a gain/income). The full liability is cleared, so:

Viji A/c is debited with ₹1,00,000 (liability reduced in full).
Cash A/c is credited with ₹96,000 (cash going out).
Discount Received A/c is credited with ₹4,000 (a gain).

Journal Entry

|---|---|---|---|---| …

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2026Set MARCH1 markMCQ
$Q. The amount brought into the business by the proprietor should be credited to$
(a) Cash account
(b) Drawings account
(c) Capital account
(d) Suspense account
›Reveal solutionSolution
Capital introduced by the proprietor is credited to the Capital account — option (c).

The entry

When the owner brings cash into the business:

Particulars L.F. Debit (₹) Credit (₹)
Cash A/c ... Dr XXX
To Capital A/c XXX

Why credit Capital?

By the business entity concept, the business is separate from its owner; whatever the owner supplies is owed back to him. This claim of the owner on the business is Capital — a liability of the business. …
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CBSE 2025Set MARCH1 markMCQ
$Q. The amount brought into the business by the Proprietor should be credited to :$
(a) Capital a/c
(b) Cash a/c
(c) Suspense a/c
(d) Drawings a/c
›Reveal solutionSolution
Money brought in by the proprietor is credited to the Capital account, so the correct answer is option (a).

By the business entity concept, the business is separate from its owner. When the proprietor brings money into the business:

The business receives cash, so Cash account is debited. …
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CBSE 2022Set MARCH1 markMCQ
$Q. In a Journal Entry, Paid salary by cheque of ₹ 3,000 is credited to :$
(a) bank A/c
(b) salary A/c
(c) drawing A/c
(d) cash A/c
›Reveal solutionSolution
Paid salary by cheque: Salary A/c is debited and Bank A/c is credited — option (a).

Applying the modern rules of debit and credit:

Salary A/c is an expense — expenses are debited when incurred, so Salary A/c Dr. ₹3,000.

Payment is by cheque, so the money leaves the bank, not the cash box. Bank A/c is an asset; an asset that decreases is credited, so To Bank A/c ₹3,000.

Journal entry:

| Particulars | L.F. | Debit (₹) | Credit (₹) |

|---|---|---|---| …
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Particulars	L.F.	Debit (₹)	Credit (₹)
Cash A/c ... Dr		XXX
To Capital A/c			XXX

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Q.Paid ₹ 96,000 in full settlement of ₹ 1,00,000 due to the creditor Viji. Pass Journal entry.

Concept understanding — Journalising Transactions

Q.Paid ₹ 96,000 in full settlement of ₹ 1,00,000 due to the creditor Viji. Pass Journal entry.

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