Paid to vishal trading company
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Paid to vishal trading company...
It means paid ie cash is gone from the business and vishal and trading company get the cash..
In other words, cash account is credited because business has to paid cash.. But on the other side vishal trading company get cash hence it is debited.
Vishal trading company a/c.. Dr.
...... TO cash a/c....
[. Being cash paid to company.]
It means paid ie cash is gone from the business and vishal and trading company get the cash..
In other words, cash account is credited because business has to paid cash.. But on the other side vishal trading company get cash hence it is debited.
Vishal trading company a/c.. Dr.
...... TO cash a/c....
[. Being cash paid to company.]
Answered by
1
The current transaction affects two accounts.. vishal trading company account(recipient of payment), Cash account..(paid cash)..
Vishal trading company account is a personal account ( As the name suggests; receiver)
Cash account is a real account ( all assets and Liabilities come under Real account: cash 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..
Vishal trading company account should be debited (its a receiver)
Cash account should be credited (cash is going out)
so the Journal Entry will be...
Vishal trading company account Dr xxxx
To Cash account xxxx
(Being cash paid to Vishal trading company)
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