Q.Which of the following statements is not true ?

The untrue statement is (a): trade discount is NOT recorded in the books of accounts. So the correct answer is option (a).

Examining each statement:

• (a) Trade discount is recorded in the books of accounts — FALSE. Trade discount is a deduction from the catalogue/list price allowed for bulk buying. It is adjusted on the invoice itself, and only the net amount is recorded; the discount is never shown as a separate entry.
• (b) Cash discount is recorded in the books of accounts — TRUE. Cash discount is allowed for prompt payment and is recorded (Discount Allowed/Received). …