Question

Business started with cash rs 175000
Purchased goods from rohit 50000
Sales goods on credit to manish (costingRs17500)20000

Answer 1

Answer:

Journal entries:

Particulars Debit Credit

Cash A/c Dr. 175,000

To Capital A/c. 1,75,000

(being business started with cash rs.175000)

Purchase A/c Dr. 50,000

To Rohit A/c. 50,000

(being goods purchased goods from Rohit )

Manish A/c Dr. 17500

To Sales A/c. 17500

(being goods sold to Manish on credit )

Explanation:

here in question 1 cash a/c is debited since it is asset and comes in real account

in real account Debit what comes in,Credit what goes out.

here cash is coming in business so it is debited.

capital account is credited as it treated as personal account and owner is giving money /cash to the business so capital account is credited.

2)

purchases is a nominal account since it is a expense

According rule of nominal account

Debit all the expenses and losses and Credit all the income and the profits.

here purchase is a expense so it debited.

As in personal account (Rohit)

Debit the reciever, Credit the giver

here Rohit account is credited because he is the giver of the goods here.

3)

Manish which is a personal account is debited since he is the reciever of goods as we know in

personal account Debit the reciever, Credit the giver.

in nominal account

sales account is credited because it is income for the business.