Question

Journal entry of ( received from akhil 38000 in settlement of his dues of 40000 in cash)

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

akhil A/c - Personal account , where ahkil 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 38000

Discount allowed A/c Dr 2000

To Akhil A/c 40000

(being received cash from akhil in full settlement )

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