Question

Q4. If, Sohan purchases goods on credit from Mohan, what will be Mohan for Sohan in accounting terms?

Answer 1

Answer:

When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.

As we will be paying it later, we need to show this in our books. So the entry for this will be

Dr. Purchase account

Cr. Accounts payable /Mohan account  

When we pay or clear the balance then we need to process the below entry

Dr.Accounts payable /Mohan account

Cr. Cash/bank account

Answer 2

Explanation:

Answer:

Answer:When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.

Answer:When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.As we will be paying it later, we need to show this in our books. So the entry for this will be

Answer:When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.As we will be paying it later, we need to show this in our books. So the entry for this will beDr. Purchase account

Answer:When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.As we will be paying it later, we need to show this in our books. So the entry for this will beDr. Purchase accountCr. Accounts payable /Mohan account  

Answer:When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.As we will be paying it later, we need to show this in our books. So the entry for this will beDr. Purchase accountCr. Accounts payable /Mohan account  When we pay or clear the balance then we need to process the below entry

Answer:When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.As we will be paying it later, we need to show this in our books. So the entry for this will beDr. Purchase accountCr. Accounts payable /Mohan account  When we pay or clear the balance then we need to process the below entryDr.Accounts payable /Mohan account

Answer:When we purchase something on credit, then we need to create a liability account. It is because we have not paid anything like cash to the seller from which we bought the goods.As we will be paying it later, we need to show this in our books. So the entry for this will beDr. Purchase accountCr. Accounts payable /Mohan account  When we pay or clear the balance then we need to process the below entryDr.Accounts payable /Mohan accountCr. Cash/bank account