Question

being balan started by investing 50,000 of cash and purchased for 4,000and bought furniture for 500.
what will be journal entry​

Answer 1

Answer:

Given

"Cash brought in 50000"

"Goods bought 4000"

"Furniture brought 500"

This transactions affect

1)two accounts , capital account ,cash account which are real accounts (All assets and Liabilities come under Real account)

2)two accounts Purchases a/c , cash a/c..where Purchases is a nominal account(all expenses incomes gains losses come under nominal account) , cash is a real account.(All assets and Liabilities come under Real account)..

3) Furniture account and cash account are also real accounts..

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

1) cash is incoming should be debited and capital(liability) is increasing, should be credited

2)Purchase is expense, should be debited and cash is going out should be credited....

3) Furniture is incoming,shouldbe debited and cash is outgoing so should be credited to that extent

The Journal Entry will be..

Cash a/c Dr 50000

To Capital a/c. 50000

(Being cash brought into the business)

Purchases a/c. Dr. 4000

To cash a/c 4000

(Being Goods Purchased for cash)

Furniture a/c Dr 500

To cash a/c. 500

(Being furniture Purchased

Explanation: