Question

800 trade expense 400 and travelling expense 500 in journal entry

Answer 1

The Current transaction affects three accounts trading expenses,travelling expenses account(it is a nominal account;all losses Gains income expenses come under nominal account; life trading expenses,travelling expenses ),, Bank/cash account.. because trading expenses,travelling expenses is paid in Cheque/cash ...(it is a Real account; all assets and Liabilities come under Real account; bank balance/cash balance is an asset) ..


The Three 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...

trading expenses,travelling expenses should be debited (it is a nominal account/its an expense)

Bank/cash account should be credited (it is a Real account/cash from bank is Going out)

The Journal Entry will be....

trading expenses,a/c 400

travelling expensesa/c Dr 500

To cash/Bank a/c. 900

(Being trading expenses,travelling expenses paid)

Answer 2

A/C Dr 800 is available for rent.

A/C Dr 400 Trade Expenses

A/C Dr 500 Travel Expenses

1700 to Cash A/C

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