Question

purchase goods bought 50000 on credit from Bihari paid 1000 for carriage on these goods​

Answer 1

Answer:

Purchases A/c                       ...Dr          50,000

Carriage Inwards A/c            ...Dr             1,000

          To Bihari                                                           50,000

          To Cash A/c                                                        1,000

(being goods purchased from Bihari on credit)

Explanation:

Meaning-  Goods are being purchased from Bihari on credit , .i.e. , we haven't paid for it yet and we owe to Bihari , .i.e , he is a creditor for the business being a liability. Also, carriage inwards (charges paid for carrying the goods to working place) is an expense for the business which is paid in cash.

Effect-

• Purchases is an asset for the business. Thus, being increased purchases will be debited.

• Carriage inwards being an expense for the business will also be debited.
• Bihari is a creditor for the business , i.e. , being a liability it will be credited.
• Carriage inwards is an expense paid in cash which results in decrease of cash which is an asset for the business. Thus, cash will be credited.

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