Question

Purchased machinery by cheque Rs.1000

Answer 1

Answer:

it comes in trading account because the machinery is purchased by that person

Answer 2

ANSWER :

The journal entry for the transaction "Purchased machinery by cheque Rs. 1000" is :-

$: \mapsto: \: \: \sf{ \large{Machinery \: \: A/C \: \: Dr. \: \: \: \: \: Rs. \: 1000}} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \sf{ \large{To \: \: Bank \: \: A/C \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: Rs. \: 1000}} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \:$

EXPLANATION :

• Step 1. Identification of accounts :- In this transaction, business paid by cheque for the purchase of machinery. Hence, the two accounts involves in this transaction are : Machinery A/C and Bank A/C.

• Step 2. Classification of accounts :- According to the Modern Approach of classification, Machinery A/C is an Asset Account and Bank A/C is also an Asset Account.

• Step 3. Application of Debit and Credit rule :- Machinery being purchased by the business and hence the value of asset increases. Therefore, the Machinery A/C will be debited (as per the rule being increase in Asset). Again, the Machinery is purchased by cheque and hence asset in the form of cheque from the Bank decreases. Therefore, Bank A/C will be credited (as per the rule being decrease in Asset).