Question

Sold goods on credit for(cost 500)700

Answer 1

Answer:

cash a/c Dr 700

to sales a/ c 700

Answer 2

Answer:

HERE, You are selling the goods to someone in credit (i.e.) you have not yet received the cash. Also you have made profit by selling the RS.500 goods at Rs.700 (PROFIT = Rs.200)

So by modern approach you have credit the income, since profit is income, and you have not yet received cash so sales accnt is also pending. Therefore, you have to credit the sales account since you have to credit the liabilty also.

So the journal would be,

Receivable account dr.

to sales account

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