Question

Paid rs 100 for refreshment for a customer

Answer 1

Refreshment Expenses A/C   Dr   Rs.100

        To Cash A/C   Rs.100

(being expenses made for refreshment of a customer)

Answer 2

The Current transaction affects two accounts life refreshment expenses(it is a nominal account;all losses Gains income expenses come under nominal account; refreshment expenses is an expense),, Bank/cash account.. because refreshment expenses is paid in Cheque/cash ...(it is a Real account; all assets and Liabilities come under Real account; bank balance/cash balance is an asset) ..


The Three golden rules of accounting are....

Personal Account: Debit the receiver, credit the giver

Nominal account: Debit All expenses and losses, credit All incomes and gains

Real Account: Debit what comes in ,credit what goes out

In contention with the above rules...

refreshment expenses should be debited (it is a nominal account/its an expense)

Bank/cash account should be credited (it is a Real account/cash from bank is Going out)

The Journal Entry will be....

refreshment expenses a/c Dr xxxxx

To cash/Bank a/c. xxxx

(Being refreshment expenses paid)