purchase furniture of Rs 2000 in exchange of good journal entries
Answers
Answered by
3
Furniture Account(Debit)
To Cash Account(Credit)
Reason:- Furniture and Cash belongs to real A/c
According to golden rule for real A/c
Debit- what comes in
Credit- what goes out
Hence when furniture is purchased for cash, assets (furniture) of the company increases and assets (cash) of the company decreases.
Note- Alternatively if the furniture is purchased on credit, then the Cash A/c in the above entry will be replaced by Name of the Creditor i.e, Creditor A/c
In this case, Creditor A/c belongs to personal A/c and golden rule for personal A/c is
Debit- the receiver
Credit- the giver
Therefore, when furniture is purchased on credit, the Creditor is giving the furniture without any decrease in company cash.
I tried my best to explain. Hope u understood.
26.2K viewsView 14 Upvoters
Promoted by SEMRUSH Inc
To Cash Account(Credit)
Reason:- Furniture and Cash belongs to real A/c
According to golden rule for real A/c
Debit- what comes in
Credit- what goes out
Hence when furniture is purchased for cash, assets (furniture) of the company increases and assets (cash) of the company decreases.
Note- Alternatively if the furniture is purchased on credit, then the Cash A/c in the above entry will be replaced by Name of the Creditor i.e, Creditor A/c
In this case, Creditor A/c belongs to personal A/c and golden rule for personal A/c is
Debit- the receiver
Credit- the giver
Therefore, when furniture is purchased on credit, the Creditor is giving the furniture without any decrease in company cash.
I tried my best to explain. Hope u understood.
26.2K viewsView 14 Upvoters
Promoted by SEMRUSH Inc
Similar questions