Question

Write journal entries for the following transactions and explain accounting treatments

based on equation :

i). Goods of ₹ 7000 Purchased from Shinchan.

ii). Wages outstanding ₹ 1000​

Answer 1

i) Purchases A/c Dr ₹7000

To Shinchan's A/c ₹7000

ii) Wages A/c Dr ₹7000

To Outstanding

Wages A/c ₹7000

(Outstanding wages are a liability for the company and hence, wages outstanding accounts is to be credited and wages is an expense to the company and has to be debited.)