cash purchases rs 5000 (accounting equation)
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Explanation:
Assets = Equity + Liabilities
( 5000 - 5000 ) = 0 + 0
0 = 0
Plz note, purchases have two oppostie effects on the Assets. It increases the stock and also reduces the cash !
Hence, the total effect becomes '0'.
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Purchase account A/C dr
To cash A/C
- Journal is the primary book of accounting where all the financial transactions are recorded. It is also known as a prime record of double entry bookkeeping.
- All the financial transactions are recorded in a detailed manner which is then posted into the respective accounts.
- Many big firms have various journals which are similar to the normal journal but are divided into various books called the subsidiary books.
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