Question

(3)
account.
Expense incurred to purchase asset is debited to
(a) Expense
(b) Asset
(c) Cash
(d) Sundry​

Answer 1

Answer:

(a) Expense

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Answer 2

Answer:

The accounts to be debited is Expenses account

Explanation:

• In golden rule , Debit what comes in , Credit what goes out is for the real account
• Assets and liabilities are the real account
• While purchasing an assets for a business is not a expenses is like an investment
• So investment are to be considered as a assets
• So purchase of the assets are not a expenses for a business
• But , here the expenses which are incurred for the purchase of assets , so there are expenses apart from the cost of the assets
• So such expenses are to debited under expenses account
• In golden rule, Debit the expenses or losses, Credit the income or gains
• So, the expenses which are incurred to purchase a asset is to be debited under the head Expenses account