Question

Building sold for Rs.25,00,000, which account will be debited and credited? a) Dr. Cash A/c and Cr. Building A/c by Rs.26,00,000
b) Cr. Bank A/c and Dr. Building A/c by Rs.25,00,000
c) Dr. Bank A/c and Cr. Building A/c by Rs.25,00.000 .
d) Cr. Cash A/c and Dr. Bullding Alc by Rs.26,00,000. *​

Answer 1

Answer:

Dr. cash A/c and Cr. building A/c by Rs. 25,00,000

Explanation:

Given the transaction that a building is sold for Rs. 25,00,000.

Two accounts involved in this transaction:

• Building A/c
• Cash A/c

Here since cash being an asset is increasing on the sale of building, we will debit it as we know that assets are debited on increase.

Sales of building is a decrease in asset which is building and assets are always credited on decrease.

So, the journal entry for the given transaction will be,

Journal entry:

Cash A/c . . . Dr - ₹25,00,000

‎ ‎ ‎To building A/c - ₹25,00,000

Hence correct answer is debit cash A/c and credit building A/c by Rs. 25,00,000