Which of the following items would appear on the credit side of a Profit and Loss Account?
ADiscount allowed
BBad debts
CDiscount receivedCORRECT
DDepreciation
GCEFinancial AccountingFinal Accounts of Sole Traders2024
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Why the answer is C, and why the others tempt you.
Discount received is an income earned by the business when it pays its creditors early and is therefore recorded on the credit side of the Profit and Loss Account. Discount allowed, bad debts, and depreciation are all expenses and appear on the debit side.
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