Write journal entries for the following transaction and explain accounung
treatment based on equation.
a. A has brought cash 20000 and furniture of 10000 to commence business.
b. Salary outstanding is 1000.
c. Goods of 6000 purchased for cash.
d. Receivable dividend 2000.
Answers
Answer:
a. Cash a/c dr 20,000
Furniture/c dr 10,000
To A's capital a/c 30,000
b. Salary a/c dr 1,000
To outstanding salary a/c 1,000
c. Purchases a/c dr 6,000
To cash a/c 6,000
d. Cash a/c dr 2,000
To dividend a/c 2,000
Explanation:
a. cash and furniture comes in so it is debited
capital is a liability for the business so it is credited being liability has cr. balance
b. salary is an expence so dr.
salary outstanding is a liability so cr.
c. purchases is an expense so dr.
cash goes out during purchase so cr.
d. cash comes in when we receive dividend so dr.
dividend is income so cr.