Question

On purchase of old machine the amount spent on its repair should be debited to:
a) Repairs account
b)machinery account
c) cash account
d) purchase account ​

Answer 1

Answer:

.......( B)

Explanation:

.... machinery account

Answer 2

Answer:

Machinery A/C

Explanation:-.....

Machine is an asset. What comes in business will be debited. In this transaction, machine comes in the business. Hence, "machinery A/c" is debited and the capital expenditure spent for asset is also debited. In this transaction amount spent on repairs of old machine should be debited to " Machinery a/c". We paid cash for purchasing old Machine....... hence, "Cash A/c" is credited.

The journal entry for this transaction is:

Machinery A/c........Dr.

To Cash A/c...

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