Question

(paid for trade expenses 4000) what is this ,the question is accountancy class 11 please help me​

Answer 1

Answer:

payment of trade expenses will be recorded in journal as

Trade expenses ac dr 4000

to cash account 4000

trade expenses is a nominal account

According to the rule of nominal account we debit all expenses and losses and credit all incomes and gains

whereas cash account is a real account

according to the rule of real account debit what comes in and credit what goes out

Explanation:

Here in this question cash is going out of the business since payment is being made. so we credit the cash account. since trade expense is an expense it is debited. at the year end trade expenses will be transferred to statement of profit and loss acount under head miscellaneous expenses to find net profit and loss