Question

purchase furniture on credit from messers . goodluck traders

Answer 1

3 golden rules

• debit the receiver , credit the giver

• debit what comes in , credit what goes out

• debit all the expenses and losses , credit all the incomes and gains

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reason for debit and credit

furniture A/c - Real A/c , where furniture comes into the business therefore its debited

Messers goodluck traders A/c   A/c - Personal A/c , where creditor  is giver of goods therefore its credited

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Journal entry

Furniture  A/c    Dr    

          To Messers goodluck traders  A/c                

(being furniture purchased for credit)

Answer 2

Furniture A/c...........Dr.                         XXX

To, M/s. Goodluck Traders A/c                           XXX

(Being furniture purchase from goodluck traders on credit basis)

1. Furniture is debit because it is a assets and all the balance of assets is increased by Debit side.

2.  Goodluck traders is credit because it is a liabilities and all the balance of liability is increased by Credit side.