transactions
1.bought machinery
for cash rs.50,000
2.payment made to XYZ
store rs.10,000by cheque
3.Purchased office
furniture on credit for
rs.15,000
4.Rs. 1,000 received as a
rent for the portion of
office building rented out
5.Paid salaries of
Rs.40,000 by cheque
from the following transactions state which account will be debited and which account will be debited from the following accounts involved, applications and reason with respect to rules of credit and debit
To determine which account will be debited and which account will be credited for each transaction, we need to understand the basic rules of debits and credits in accounting.
The rules of debit and credit are as follows:
1. Debit the increase in assets and expenses, and credit the decrease in assets and expenses.
2. Credit the increase in liabilities, revenues, and equity, and debit the decrease in liabilities, revenues, and equity.
Now, let's analyze each transaction and identify the accounts that will be debited and credited:
1. Bought machinery for cash Rs. 50,000:
- Debit: Machinery (increase in assets)
- Credit: Cash (decrease in assets)
2. Payment made to XYZ store Rs. 10,000 by cheque:
- Debit: XYZ Store (decrease in assets)
- Credit: Cash (decrease in assets)
3. Purchased office furniture on credit for Rs. 15,000:
- Debit: Office Furniture (increase in assets)
- Credit: Accounts Payable (increase in liabilities)
4. Rs. 1,000 received as rent for the portion of office building rented out:
- Debit: Cash (increase in assets)
- Credit: Rental Income (increase in revenue)
5. Paid salaries of Rs. 40,000 by cheque:
- Debit: Salaries Expense (increase in expenses)
- Credit: Cash (decrease in assets)
By following the rules of debit and credit, we can determine the appropriate accounts to be debited and credited for each transaction.