Question

Illustration 12.
He brought goods 32,000 and furniture of 28,000. His transactions for the month are as
Japsimar of Amritsar started business on January 1, 2016 by investing Cash of 2,40,000.
follows:
Jan. 1 Purchased goods worth 15,000 less 20% trade discount and 5% cash
discount.
Jan. 2 Opened current account in Bank of India with 1,00,000.
d 10% trade discount.​

Answer 1

Answer:

Explanation:

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

Purchases A/c - Nominal A/c , its the expense to the company therefore its debited

Ram traders   A/c - Personal A/c , where creditor  is giver of goods therefore its credited

Cash A/c - Real A/c , where cash goes out of the company therefore its crdited

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Journal entry

Purchases A/c    Dr   85000

          To cash A/c                          30000

          To Ram traders A/c                55000

(being goods purchased for cash and credit)