The Effect Of Cash Received From Sales On Accounting Equation
How Is Owner’s Equity Affected When Cash Is Received From Sales Or What Is The Effect Of Cash Received From Sales On Owner’s Equity? / How Is Owner’s Equity Affected When Services Performed Or Rendered For Cash When the cash received from goods sold or services rendered for cash (it is called Cash Sales ), then we debit cash account as it is increasing i.e., it is coming into the business and credit Sales Account as it is also increasing i.e., due to the increase of profitable activities or operations of owners of the business. For example, if Mr.A is a sole proprietor sold goods worth Rs. 5000 to a customer, Mr. B, then the following journal entry is recorded in the books of business as shown below: Cash a/c 5000 ...