Paid cash to radhey for outstanding bill for printing
Answers
Answer:
radhey a/C debit to cash a/C credit
Payment of Cash to the outstanding bill of Radhey
The firm has to make the payment to Radhey, which means he is the creditor of the firm.
The payment has to be made against the service of bill printing taken by the firm earlier.
Radhey is a creditor to the firm as the firm has taken service from them but the payment is yet to make.
Creditors in terms of accounting is a liability and when liability Decreases it is debited.
The payment will be made by cash or bank account that is as an asset and as the value of the asset decreases it is credited.
Therefore the Journal Entry,
RADHEY A/C ------dr xxx
TO CASH A/C xxx
( being payment made to Radhey)
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