Question

AB Ltd company purchased a machinery on 1st April, 2015 rs 80000 by cheque

Answer 1

3 golden rules

• debit the receiver , credit the giver

• debit what comes in , credit what goes out

• debit all the expenses and losses , credit all the incomes and gains

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reason for debit and credit

MAchinery A/c - real A/c , asset comes into the company therefore its debited

BAnk A/c - Personal A/c , here banker payer to supplier , therefore its credited

* as payment made through cheque therefore its credited to bank A/c

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Journal entry

MAchinery A/c  Dr    80000

          To bank A/c                           80000

(being machinery purchased )