Which Types Of Accounts Are Affected When A Business Receives Cash Or Cheque / Check From Sales
What Is The Effect Of Cash Received From Sales On The Accounting Equation When a business receives Cash from goods / merchandise sold or Sales , then the cash account on the asset side (left side) of Accounting Equation is affected and Owner’s Equity on the right side of the accounting equation is affected as sales is the result of operating activities of the owner of the business. Example, Mr. A is a sole proprietor, received cash Rs. 5000 from sales. What is the effect of this transaction on the accounting equation? Firstly, we must know the journal entry for the cash sales transaction. So, the following journal entry is recorded for cash received from sales: Cash a/c 5000 ...