Question

what is the journal entry for ' sold old furniture for rs 50000'

Answer 1

Answer:

Explanation:

In the above example the first and foremost thing that needs to be ascertained is whether the furniture in question is goods related to business or an asset.

Usually when a business asset is sold, it is referred as Furniture or Machinery. Whereas when a business which deals in furniture makes a sale it is referred as Goods.

In the above example the asset is clearly mentioned hence it is believed it is a business asset and not a business which deals in furniture.

In the above example two accounts are affected :

• Cash a/c

• Furniture a/c

The above mentioned accounts belongs to Real account.

As cash is coming in Cash a/c will be debited  and Furniture a/c will be credited as it is going out. This is done as per The Golden rule of real accounts explains  Debit what comes in and Credit what goes out.

So the journal entry will be-

Cash a/c ……………….…Dr   50000

To Furniture a/c.............     50000

Hope this helps.

Answer 2

Explanation:

Cash a/c ............Dr 50000

to Furniture a/c 50000