Question

Purchased machinery rs 50000 and paid of a bank draft. Paid bank charges 500

Answer 1

Machinery A/C  Rs.50,000

Bank Charges A/C  Dr Rs.500

    To  Bank Overdraft A/C  Rs. 50,500

(being machinery purchased and bank charges paid using Bank OD)

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

Machinery A/c - real A/c , asset comes into the business therefore its debited

Bank charges A/c - nominal A/c , its expenses to the company therefore its debited

Bank A/c - Personal A/c , Bank is paying money to supplier hes the giver therefore its credited .

bank draft is another form of payment method . its similar to cheque

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Journal entry

Machinery A/c   Dr      50000

Bank charges A/c Dr  500

             To Bank A/c                     50500

(being purchased machinery )