Question

Ram sold goods to us Rs 20000 What is the general entry of this

Answer 1

Given"Ram Sold Goods to us @20000"..Which means we Purchased goods from Ram worth 20000..

This Transaction affects Two accounts.. Purchases a/c(we Purchased goods) , Ram a/c (we Purchased them from Ram on credit)..

Purchases a/c is a nominal account (all expenses incomes gains losses come under it) and Ram a/c is a Personal account...


The Three golden rules of accounting..

Personal Account - Debit The reciever, credit the giver

Real account - Debit what comes in, credit what goes out

Nominal account - Debit All expenses and losses, credit All incomes and gains

In contention with the above rules... Purchases being an expense to us.. should be debited and Ram being the giver should be credited...



So The Journal Entry will be

Purchases a/c Dr. 20000

To Ram a/c 20000

(Being Goods Purchased from Ram)

Answer 2

3 golden rules

personal accounts - debit the received and credit the giver

real accounts -debit what comes in and credit what comes out

nominal accounts - debit all the expenses and losses, credit all the income and gains

as per the question 2 accounts affect Purchases account and ram(creditor) account

Purchases account - Nominal account

Ram account - Personal account

by applying the golden rules ,

Journal entry

Purchases A/c Dr 20000

To ram A/c 20000

(Being purchased goods for credit )

Hope its useful..!!