Question

Purchase goods from raj in cash rs 75000

Answer 1

Given"Purchased goods from Raj worth 75000"..

This Transaction affects Two accounts.. Purchases a/c(we Purchased goods) , Cash a/c (we Purchased them from Raj on cash)..

Purchases a/c is a nominal account (all expenses incomes gains losses come under it) and Casha/c is a Real account...(all the assets and Liabilities come under it)


The Three golden rules of accounting..

Personal Account - Debit The reciever, credit the giver

Real account - Debit what comes in, credit what goes out

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

In contention with the above rules... Purchases being an expense to us.. should be debited and since cash is Going out,should be credited...



So The Journal Entry will be

Purchases a/c Dr. 75000

To cash a/c 75000

(Being Goods Purchased from Raj on cash)

Answer 2

3 golden rules

personal accounts - debit the received and credit the giver

real accounts -debit what comes in and credit what comes out

nominal accounts - debit all the expenses and losses, credit all the income and gains

as per the question 2 accounts affect purchases account and cash account

Purchases account - personal account

cash account - real account

by applying the golden rules ,

Journal entry

Purchases A/c Dr 75000

To cash A/c 75000

(being purchased goods for cash from Raj)

Hope its useful..!!!