BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Sale of goods to X will be debited to?
A
cash a/c
B
sales a/c
C
X a/c
D
none of these
Explanation: 

Detailed explanation-1: -Sales of goods on cash involves cash and goods account. Both cash and goods are real account. Rule for real account says” debit what comes in". Against sale of goods cash is coming in the system, hence cash account should be debited.

Detailed explanation-2: -When goods are sold on credit, debtors which is an asset account is debited as money is receivable from the customers and sales which is a revenue account is credited.

Detailed explanation-3: -Purchase increases when goods are bought, and purchase can be increased by debiting purchase A/c and creditors increases when goods are purchased on credit, and creditors increase by crediting them. Q. While passing the entry for credit sales is debited and is credited.

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