Borrowed 25,000 from Shri Mahesh for business purpose .(analysis as per traditional approach)
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1.Purchases Account is used for purchase of goods for resale and not for purchase of asset.
2. In cash purchases, the seller's name is not relevant. Hence, it is not considered. Similarly in cash sales, the purchaser's name is not relevant. Hence, it is not considered.
3.Sales means selling the goods which forms part of stock-in-trade of the business. Sale of old assets is not 'sale' in the accounting.
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