Question

Some of the transactions of a firm are given below. Against each transaction the accounts to be debited and credited are given. There are some obvious errors. Point out the errors and give correct answers.
Purchased goods from Rao for Cash :

Debit: Goods & Purchase: Credit Rao.

Answer 1

• Errors:-

1. Purchase A/c is to be debited as rule for Dr. is that what comes in.

2. Cr. What goes out rule is to be followed , hence cash should be credited.

• The correct Journal Entry Will be :-

Purchase A/c Dr.

To Cash