Question

Give journal entries:
For recording purchase of asset.

• A. Asset A/c Dr.
  To Bank A/c
• B. Asset A/c Dr.
  To Vendor A/c
• C. Asset A/c Dr.
  To Buyer A/c
• D. Both (a) and (b)

Answer 1

Answer: (D)

Both (a) and (b)

As per the golden rules of accounting for real account, what comes in debit and what goes out is credit.

In light of above rule, journal entry for purchase of asset should be:

1. Asset A/c Dr.

To Bank A/c

(Being asset purchased for cash)

2. Asset A/c Dr.

To Vendor/ creditor A/c

(Being Asset purchased on credit)