Cash amounting ₹700 is stolen by their and amount recovered from him was only ₹500. Journalise
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Answered by
6
ANSWER :
Cash A/C ...Dr. 500
Bad debt A/C. ...Dr. 200
To Debtor A/C. 700
(being bad debt recovered)
HOPE IT HELPS
☜☆☞
Cash A/C ...Dr. 500
Bad debt A/C. ...Dr. 200
To Debtor A/C. 700
(being bad debt recovered)
HOPE IT HELPS
☜☆☞
RohitSaketi:
there is some interpretation on your part... check my answer @purpura
OK sir
Answered by
15
Given" Cash amounting Rs 700 has been stolen by a person and the amount recovered from him amounts to Rs 500 only."
This transaction affects two accounts... Cash embezzlement a/c (because cash was stolen by a person ...it's a loss to us/or the business...) ..Cash account (cash balance
Cash embezzlement account is a nominal account.(cash embezzlement/loss due to theft is a loss ; all expenses Losses gains income come under nominal account)
Cash account is a real account.(cash is an asset; all assets and Liabilities come under Real 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
In contention with the above rules..
cash embezzled a/c should be debited (because it is a loss)
cash should be credited (because cash is going out)
If there is any recovery .. the entry should be reversed to that extent....
Now coming to the Journal Entry ..
If Cash Stolen/ cash Recovered are on the same day...
Cash Embezzlement a/c. Dr 200
To Cash a/c. 200
(Being cash embezzled)
[OR]
Cash Embezzlement a/c Dr 700
To Cash a/c 700
(Being Cash Embezzled)
Cash a/c. Dr 500
To Cash Embezzlement a/c. 500
(Being embezzled cash Recovered)
Net Effect will be '200'
[Note : There you can see two types of treatment for a single transaction(s) .. Selection of one among them depends on the accountant's individual judgement..I Personally Recommend the second one..As it is a better way of presentation of accounts]
If Cash Stolen/ cash Recovered occur on different days ..
Cash Embezzlement a/c Dr 700
To Cash a/c 700
(Being Cash Embezzled)
Cash a/c. Dr 500
To Cash Embezzlement a/c. 500
(Being embezzled cash Recovered)
This transaction affects two accounts... Cash embezzlement a/c (because cash was stolen by a person ...it's a loss to us/or the business...) ..Cash account (cash balance
Cash embezzlement account is a nominal account.(cash embezzlement/loss due to theft is a loss ; all expenses Losses gains income come under nominal account)
Cash account is a real account.(cash is an asset; all assets and Liabilities come under Real 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
In contention with the above rules..
cash embezzled a/c should be debited (because it is a loss)
cash should be credited (because cash is going out)
If there is any recovery .. the entry should be reversed to that extent....
Now coming to the Journal Entry ..
If Cash Stolen/ cash Recovered are on the same day...
Cash Embezzlement a/c. Dr 200
To Cash a/c. 200
(Being cash embezzled)
[OR]
Cash Embezzlement a/c Dr 700
To Cash a/c 700
(Being Cash Embezzled)
Cash a/c. Dr 500
To Cash Embezzlement a/c. 500
(Being embezzled cash Recovered)
Net Effect will be '200'
[Note : There you can see two types of treatment for a single transaction(s) .. Selection of one among them depends on the accountant's individual judgement..I Personally Recommend the second one..As it is a better way of presentation of accounts]
If Cash Stolen/ cash Recovered occur on different days ..
Cash Embezzlement a/c Dr 700
To Cash a/c 700
(Being Cash Embezzled)
Cash a/c. Dr 500
To Cash Embezzlement a/c. 500
(Being embezzled cash Recovered)
thanks
sir
Thanks Jaya<3
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"&it:" means "lesser than symbol" .. i tried Sending heart symbol.. but i didnot work
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