Question

3.1/2 of the above goods sold aprofit of 20% on cost half the payment received in cash

Answer 1

Given "1/2 of the above goods sold aprofit of 20% on cost half the payment received in cash

Let Cost Price be 10000(assuming)

Profit = 10000 × 1/2 = 5000

Selling Price= 10000 + 5000 = 15000


Of which half payment is recieved in cash.... 3
15000/2 = 7500

Remaining 7500 on credit...

So this transaction affects 3 accounts ... Sales a/c ( being Goods sold) , Cash a/c ( half of the payment is recieved in cash) , Debtor a/c(remaining half on credit)..

Sales a/c is a nominal account..(All incomes gains losses expenses come under it... Sales is an income)

Cash a/c is a real account...(All the assets and Liabilities come under it.... Cash is an asset)

Debtor is a Personal account..(As the Name suggests)


The golden rules of accounting are...

Personal Account - Debit the receiver , credit the giver

Nominal Account - Debit All expenses and losses, credit All incomes and gains

Real Account - Debit what comes in , credit what goes out

In contention with the above rules........v

Cash should be debited.. Because its coming in

Debtor Being the receiver should be debited..

Sales being an income should be credited...

So the Journal Entry will be....

Cash a/c Dr 7500

Debtor a/c Dr 7500

To Sales a/c. 15000

(Being Goods Sold)