Question

On purchase of old furniture, the amount spent on its repair should be debited to _________.

• A. repair account
• B. furniture account
• C. cash account
• D. bank account

Answer 1

Answer: (B)

furniture account

The furniture is an asset. What comes in business will be debited. In this transaction, furniture comes in the business. Hence, "Furniture A/c" is debited and the capital expenditure spent for asset is also debited. In this transaction amount spent on repairs of old furniture should be debited to "Furniture a/c". We paid cash for purchasing old furniture hence, "Cash A/c" is credited.

The journal entry for this transaction is:

Furniture A/c........Dr.

To Cash A/c