Question

Goods sold on cash to Arun for Rs 2000

Answer 1

ANSWER :

The journal entry for "Goods sold on cash to Arun for Rs. 2000" is :-

$: \mapsto : \: \: \sf{ \large{ Cash \: \: A/C \: \: Dr. \: \: \: \: \: Rs. \: 2000}} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \: \: \: \: \: \: \: \: \: \: \: \:\sf{ \large{To \: \: Sales \: \: A/C \: \: \: \: \: \: \: \: \: \: \: Rs. 2000}}$

EXPLANATION :

• Step 1. Identification of accounts :- In this transaction, the business has sold goods for cash. It means there is an exchange of goods for cash. Therefore, the two accounts involved in this transaction are : Sales A/C and Cash A/C.

• Step 2. Classification of accounts :- According to Modern Approach of accounts classification, Sales A/C is a Revenue Account and Cash A/C is an Asset Account.

• Step 3. Application of Debit and Credit rules :- When goods sold for cash, the revenue in the form of sale increases and hence, the Sales A/C will be credited (as per the rule being revenue increases : credited). Again, asset in the form of cash increases and hence, the Cash A/C will be debited (as per the rule being asset increases : debited)