Which of the following is a liability?

Loan from Mr. Y

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Loan to Mr. Y

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Both A & B

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None of these

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Solution

The correct option is A Loan from Mr. Y
Any amount taken as loan from a third party is a liability for the business and to be shown in the liability side of the balance sheet.

Accounting entry for loan from Mr. Y will be as under:

Cash/Bank A/c Dr.
To Loan from Mr. Y

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Similar questions

Mr. A has bought goods worth Rs 1,00,000 from Mr. B on credit. Which of the following is true?

2011 Jan	1	Mr. Shinde’s A/c shows Debit balance of Rs 600.
	1	Sold goods to Mr. Shinde Rs 500.
	5	Received Cash from Mr. Shinde Rs 500.
	10	Credit sales to Mr. Shinde Rs 2,000.
	25	Returned goods from Mr. Shinde Rs 250.
	31	Received cash from Mr. Shinde Rs 750.
Feb.	1	Received crossed Cheque from Mr. Shinde Rs 1,100.
	15	Credit sales to Mr. Shinde Rs 400.
	28	Mr. Shinde settled his A/c by paying cash. Discount allowed to him Rs 200.

Mr. X has borrowed a sum of Rs 10,000 from Mr. Y who has a business of selling pulses. Which of the following is correct?

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