Question

anyone pls answer this what will happen in 5th entry (Jan. 25) i.e. out of the above, timber is used for furnishing the office .

Answer 1

Given"Timber taken for Office ki use"

This transaction affects two accounts Drawings a/c, Purchases a/c..where Drawings and Purchases iare nominal accounts(all expenses incomes gains losses come under nominal account)..


The Three golden rules of accounting are

Personal account - Debit the receiver , credit the giver

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

Nominal account- Debit All expenses and losses, credit all incomes and Gains

As Per the above rules..since Drawings isan expense should be debited and purchase is an income /Goods(asset) are decreasing so should be credited....



The Journal Entry will be..

Drawings a/c. Dr. xxxx

To Purchases a/c xxxx

(Being Goods drawn for office use h)

Answer 2

hope this is helpful

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