Question

sold furniture on credit pass the journal entry

Answer 1

Answer:

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CREDITOR A/C ....DR.

TO FURNITURE A/C .

Explanation:

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Answer 2

Answer:

Before preparing the journal entry for the above transaction, two points need to be clarified:

In case of ‘Furniture’ we need to understand weather it is ‘Goods’ for the business or an asset. Generally when an asset of a business is sold, its name is given like machinery, furniture or vehicle. In case the items in which a business deals are sold, they are referred to as ‘Goods’. So in the present case name of the asset is given hence it is assumed that the business does not deal in furniture, but it is an asset of the business.

Second point to be clarified is regarding weather furniture is sold for cash or credit. Generally when an asset or goods are sold on credit, then the buyer’s name is given in the transaction. In case of cash transaction, the buyer’s name is not important and is generally not provided. So from above it seems that furniture has been sold to Ali on credit.