Question

5) How is the cash purchase of goods for resale entered in the ledger?

Answer 1

Answer:

cash a/c dr

to Goods sold ac

Answer 2

Answer:

Cash purchases of goods for resale is inventory for the year.

Journal entry:

01-01-2021 Purchases / Inventory A/c------------------Dr.    1000

                                     To Cash A/c                                               1000

                  ( Being Purchases goods with cash for resale)

Explanation:

All purchases made for resale are accounted as inventory.

Note: for the purpose of explaining date and amount is added to the question