Question

Loan taken from State Bank should be credited to ______.
A) Capital A/c
B) State Bank A/c
C) Cash A/c
D) State Bank Loan A/c​

Answer 1

Answer:

D) State Bank Loan A/c

Loan taken from State Bank should be credited to State bank loan A/c.

Explanation:

Journal Entry:

Bank A/c--------------Dr

         To State Bank Loan A/c

(Being loan taken from State Bank)

As per real account (golden rules of accounting) all liabilities should be credited and assets should be debited.

Also liabilities repayment is debited and receipt is credited.