Question

purchased goods on credit from Mr. mahajan rs. 100000​

Answer 1

ANSWER :

❒ Given the transaction is :-

• Purchased goods on credit from Mr. mahajan Rs.100000

❒ Journal Entry :-

$: \mapsto: \: \: \sf{ \large{ Purchase\: A/C \: \: Dr. \: \: \: \: \: \: \: \: \: \: \: \: \: \: Rs. \: 100000}} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \sf{ \large{ \: \: To \: \: \: Mr. \: \: Mahajan\: \: A/C \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: Rs. \: 100000}} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \\ \sf{ \large{[ \: Being \: \: goods \: \: purchased \: \: on \: \: credit \: ] }} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \:$

___________________________________________________________

EXPLANATION :

❖ The three steps involved in the process of journalising the given transaction are :-

• Step 1. Identification of accounts : In this transaction, goods purchased on credit from Mr. Mahajan for Rs. 100000. Hence, the two accounts involve in this transaction are : Purchase A/C and Mr. Mahajan A/C.

• Step 2. Classification of accounts : According to the Modern Approach of classification, Purchase A/C is an Expense Account and Mr. Mahajan A/C (creditor) is a Liability Account.

• Step 3. Application of Debit and Credit rule : When goods purchased on credit, the value of Expense increases. Therefore, the Purchase A/C will be debited (as per the rule being increase in Expsense :Debited). Again, when goods are purchased on credit, creditors increase which increases the liability of the business and hence Mr. Mahajan A/C will be credited (as per the rule being Liability increase: Credited).