Question

Purchased laptop for ₹ 40,000 from joshi electronics @18 % GST and paid by cheque journal entry

Answer 1

Answer:

Journal Entry

Laptop A/c--------------Dr       40000

GST A/c------------------Dr          7200

      To Joshi Electronics A/c                                      47200

(Being laptop purchased from Joshi electronics)

Explanation:

The given transaction is a credit transaction.

As per real account rule (golden rules of accounting) all liabilities should be credited and assets should be debited.

Assets coming into the business entity should be debited and going out of the business entity should be credited.

GST is calculated as 7200 i.e. 40000 × 18% is also a tax credit which can be adjusted against tax payment.

Total value of the asset is equal to 47200.

Joshi electronics is a sundry creditor (liability a/c). Hence, credited.