Question

What is the journal entry for machinery sold to laxmi entreprices 50000

Answer 1

Given "Machinery Sold to laxmi enterprises 50000"

This transaction affects two accounts sales a/c , laxmi enterprises a/c..where Purchases is a nominal account(all expenses incomes gains losses come under nominal account) , laxmi enterprises a/c is a Personal account ..


The Three golden rules of accounting are

Personal account - Debit the receiver , 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

As Per the above rules..since Sales is an income should be credited and laxmi enterprises being the receiver should be debited....



The Journal Entry will be..

Laxmi enterprises a/c. Dr. 50000

To sales a/c 50000

(Being Goods Sold to laxmi enterprises)