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It is possible that a company received Cas h from its customers for the goods sold to them or it received cash from banks or other financial institutions on account or credit basis for running the business or for other business funding‘s purposes. When Cash is received For Cash When Cash is received , it means we received it either from bank or any other parties. In that case, the Accounting Journal Entry to be record in the Cash Book is shown below:                                                    Cash a/c  XXX                                                                   B ank / Other Party’s N ame  XXX       ...

A Company can sold merchandise either for cash / cheque or check or on account / credit to it customers. When merchandise or goods sold for cash, then the Journal Entry would be as shown below:                                                            Bank a/c / Cash a/c  XXX                                                                          Sales a/c   XXX                                             (Merchandise or Goods Sold For Cash /  By Check) The above entry is eno...

A company can purchase office equipment on account and it is the case of purchase of office equipment on account or  on  credit. The Journal Entry should be the debit to office equipment accou nt  and credit to the Accounts Payable Account . For example, if the company purchased office equipment for its main office / head office of Rs. 50000 from its supplier, A & Co., then the entry to record office equipment in the B ook or Journal of company is shown below:                                       Office Equipment a/c  50000                                                                         A& Co.  50000       ...

Purchased supplies on account effect on Assets is that these are increased after the purchase. So, we debit supplies account and credit Accounts Payable Account and hence as a result total assets on asset side on the Balance Sheet   increase. Similarly, liabilities & equity side also increases with the same amount but both sides of Balance sheet remain same in total monetary value. It also means that both asset and Liabilities & Equity sides of the Accounting Equation increase with the same amount but the total of both sides remain the same. Let’s us take an example of purchased office supplies on account Rs. 5000 from Mr. A a nd its effect on accounting equation. Purchased Supplies On Account Debit Or Credit The Journal Entry is shown below:                                    Office Supplies a/c  5000   ...

The purchase of an Asset on credit or on account is the result of debit to the asset account and credit to the Accounts Payable Account and there is no Cash Account involved in it based on Accrual Basis of Accounting . The Journal Entry is given below:                                        Asset a/c  XXX                                                       Accounts Payable a/c  XXX                                                     (Purchased Asset On Credit) You May Also Be Interested In, “ The Purchase Of An Asset For Cash ” Fo...

The purchase of an Asset for Cash or on account or credit is made only for using the asset in the business and not for resale purposes. When the company or  the corporation purchased an asset for cash, then it results in the debit of asset account and credit to cash account. You Can Also Read Out, “ The Purchase Of An Asset On Account ” For example, if the company purchased furniture Rs. 50000 for cash from Mr. A & Co. to be used in the business, then it is a purchase of furniture for cash and following  Journal Entry can be recorded as follows:                                          Furniture a/c  50000                                                           ...

Purchasing of Office Supplies can be treated as Assets if these are unused or in hand in the business and provide probable benefits in future according to the Accrual Basis of Accounting but if these are consumed for running the daily operations of the business, then these are considered as Expenses in Accounting as these are consumed or used during the accounting period. The company can purchase supplies on account or credit or for cash. When supplies purchased on account then Accounting Journal Entry is recorded as follows:                                      Office Supplies a/c  XXX                                                                   Accounts Payable a/c  XXX ...

Sales T Account is a standard form of a Ledger Account . It is prepared to record only Credit Sales Transactions transferred from Sales Journal According to the Rules of Debit And Credit , the normal or usual balance (which is finally closed at the end of the accounting period to Income Statement Later on) is Credit , but when it decreases, we debit as in case of passing Closing Journal Entries . Let’s us prepare Sales T Account with the help of an example. Suppose, Mr. A is a sole proprietor. He deals in the Sales of clothes. On 1 st March, 2019, he sold 10 pieces of clothes each costing Rs. 5000 during the period of Rs. 50000 to his customer (Accounts Receivable), Mr. b. This creates Credit Sales in the Books of Accounts of business of Mr. A. Then, at first, this Transaction is journalized to Sales Journal and then posted to Sales Ledger Account as shown below:                       ...

When there is a Sale of Equipment or sale of Office Fur niture , then the Accounting Journal Entry depends upon the gains or loss or no gain no loss cases. You Ca n Also Study, “ Disposal Of Depreciable Assets ” (i) Where there is a Gain, then the entry is given below: Accumulated Depreciation - Equipme nt a/c / Fur niture a/c  XXX Cash a/c  XXX                                                  Equipme nt /  Furniture a/c  XXX                                                  Gains on Disposal of Equipme nt  / Fur niture  a/c  XXX                                 ...