Hi,
In the journal entries -
Drawings A/c Dr. To Purchases A/c
Charity A/c Dr. To Purchases A/c
can somebody tell what is the exact reason for crediting purchases a/c in all such transactions?
Menu
Entry
Replies (3)
Dear if u paid cash to someone or something,then ur cash balance will reduced,& therefore for decrease in cash the cash is to be credited
in the same manner if the owner takes caertain business goods or the goods are given at charity then goods balance has been reduced so as a rule for decrease in asset(here goods is the asset),goods/purchase is to be credited
in the first entry goods purchased are being drawn by the ownerand in second entry good purchased are given for charity thereby decreasing the goods purchased. since asset is decreasing it is credited following the rule DEBIT WHAT COMES IN CREDIT WHAT GOES OUT.
in the first entry goods purchased are being drawn by the ownerand in second entry good purchased are given for charity thereby decreasing the goods purchased. since asset is decreasing it is credited following the rule DEBIT WHAT COMES IN CREDIT WHAT GOES OUT.
Recent Topics :
- Tax Benefit on Second Property
- IPO application checklist: 18 rules that decide wh
- NSE IPO Price, GMP, Allotment Date and Listing
- Gst tax rate
- Cash deposited by customer
- CAPITAL GAIN REG
- Built a simple tool to automate client document fo
- Capital Gain on Sale of SRA Allotted Flat Received
- Discrepancy in Auto populated figures in GSTR1 of
- What should I do after receiving a GST Show Cause
Related Topics :
CAclubindia
