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Very important entry

Abheer (student) (217 Points)

04 July 2012

JOURNALIZE THE FOLLOWING ENTRIES IN THE BOOKS OF GUPTA BROS.

paid Rs 300 for expenses on goods sold to Goyal Bros. This amount to be realised from Goyal Bros.

pls tell the journal entry

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SAURABH DILIP JOSHI (N.A.) (74 Points)
Replied 05 July 2012

selling exp. a/c Dr To cash being amt spend on behalf of .... broth. selling exp receivable a/c Dr To selling exp Being prov for reimbersument of selling exp frm debtor cash a/c Dr To selling exp receivable being reveipt of exp frm debtor

1 Like

Abheer (student) (217 Points)
Replied 05 July 2012

in my book it is written goyal bros a/c dr. TO cash a/c.....

what now??

MAHESH GARG (AUDIT EXECUTIVE) (334 Points)
Replied 05 July 2012

It is perfectly correct written in your book

Since you have incurred expenses on behalf of your debtor you will have to raise the debtor balance as the amount is to be re imbursed by the debtor.

That means debtor will be debited for the payment to be received by you from him.

And as cash has been paid it will be credited.

Just remember the golden rule of accounting

It will help you

1 Like

indraneel (student) (39 Points)
Replied 05 July 2012

ya thats right

goyal bros a/c dr

to cash

being amount spent on behalf of goyal bros

hera as and when you pay the amount which is payable by goyal bros, he becomes debtor of guptha, and after realising the amount

cash a/c dr

to goyal bros a/c

debit what comes in cr what goes out , as you recieve cash debit cash a/c as you are recieving them from goyal bros cr them so prioe debit stands cancelled

Abheer (student) (217 Points)
Replied 05 July 2012

thank you mahesh garg,. i m totally satisfied with your answer..

Abheer (student) (217 Points)
Replied 05 July 2012

but there is one problem. as i have understood the thing that cash is going so it would be credited. but i m confused whether goyal bros a/c will be debited or selling expenses a/c will be debited?? how the golden rule of account apply here??