Question

Purchased goods worth ₹ 40000 for cash and ₹ 45000 on account

Answer 1

Purchases A/C. Dr. Rs.85,000

To Cash A/C. Rs.40,000

To Bank A/C. Rs.45,000

(Being goods purchased )

Answer 2

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

Purchases A/c - Nominal A/c , its the expense to the company therefore its debited

Creditor  A/c - Personal A/c , where creditor  is giver of goods therefore its credited

Cash A/c - Real A/c , where cash goes out of the company therefore its crdited

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Journal entry

Purchases A/c    Dr  85000

           To cash A/c                     40000

           To creditor A/c                45000

(being goods purchased for cash and credit)