sold goods costing 10000 to mohan for cash 14000
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Answer:
cash AC Dr 14000
sale AC cr 10000
to profit AC cr 4000
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0
Correct Answer:
Mohan A/c Dr.
To Cash A/c
To Profit & Loss A/c
Explanation:
- Mohan will be debited because goods are sold to Mohan, he is the receiver of the goods.
- The rules of debit and credit are:
- Debit what comes in, Credit what goes out.
- Debit all loses and expenses, Credit all incomes and gains.
- Debit the receiver, Credit the giver.
- So, Mohan is being sold goods and sales journal entry is written as cash or person's name account debit and sales account credit.
- Mohan to sales if there was no cash, but since sales is made for cash, entry will be Mohan to cash.
- And since there is a difference in the cost of goods being sold so the extra margin will be credit to the Profit & Loss Account.
- Since, there is a 4000 positive difference, it will be a profit for the goods sold.
Hence, the final answer will be:
Mohan A/c Dr. 14000
To Cash A/c 10000
To P/L A/c 4000
(being goods sold for cash)
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