Question

Give journal entry of the given transaction : Recieved cash from baman 16000 in full settlement of a|c 17000 {with GST}

Answer 1

3 golden rules

• debit the receiver , credit the giver

• debit what comes in , credit what goes out

• debit all the expenses and losses , credit all the incomes and gains

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reason for debit and credit

Baman A/c - Personal account , where Baman is the debtor who is the giver , therefore its credited

Cash A/c- Real A/c , money comes into the company therefore its debited

Discount allowed - Nominal A/c , its a expenses or loss to the company therefore its debited

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Journal entry

Cash A/c Dr 16000

Discount allowed A/c Dr 1000

To Baman A/c 17000

(being received cash from Baman in full settlement )

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* gst entries will be entered at the time of sale not at the time of receipt. therefore no gst entries.