what is the entry of purchased furniture payment made by cheque?
Answers
Answer:
furniture ac dr.
to bank ac
Step-by-step explanation:
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Answer:
What is the journal entry of purchased furniture?
Rajiv Vadera
Answered June 6, 2019
Before recording a journal entry, it is important to understand different types of accounts maintained under Book-Keeping & Accountancy and also three Golden Rules of Accounting.
Refer -
Assuming that furniture is bought for cash, from the point of view of business, the two accounts affected are-
Furniture a/c
and
Cash a/c.
Both the above accounts are Real Accounts.
Furniture a/c is a real account and will be debited in this transaction as the furniture is coming into the business under this transaction. The Golden rule of real accounts states 'Debit what comes in, Credit what goes out’.
Cash a/c is also a real account. Cash a/c will be credited as, under this transaction, cash is going out of the business. The Golden rule of real accounts states 'Debit what comes in, Credit what goes out’.
Hence the journal entry will be
Furniture a/c ……………….…Dr
To Cash a/c
(Being furniture purchased)
Note - In case the payment for furniture is done by cheque, bank a/c will be credited in place of cash a/c.
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Bibi Ghousia Taj
Answered January 19, 2019
Furniture Account(Debit)
To Cash Account(Credit)
Reason:- Furniture and Cash belongs to real A/c
According to golden rule for real A/c
Debit- what comes in
Credit- what goes out
Hence when furniture is purchased for cash, assets (furniture) of the company increases and assets (cash) of the company decreases.
Note- Alternatively if the furniture is purchased on credit, then the Cash A/c in the above entry will be replaced by Name of the Creditor i.e, Creditor A/c
In this case, Creditor A/c belongs to personal A/c and golden rule for personal A/c is
Debit- the receiver
Credit- the giver
Therefore, when furniture is purchased on credit, the Creditor is giving the furniture without any decrease in company cash.