1. A firm buys stock for $100 by cheque and intends to
sell it for $200, so the double entry should be
a) Debit bank $100 and credit stock $ 100
b) Credit bank $ 200 and debit stock $ 200
c) Debit purchases $100 and credit sales $ 200
d) Debit purchases $ 100 and credit bank $ 100
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Answer / baddam.venugopalreddy
purchases $ 100.....a\c
to bank $ 100
BECAUSE THEY INTENDS TO SELL, BUT THEY HASN'T SELL YET..
WE CAN WRITE ENTRY WHEN THE TRANSACTION IS MADE..
| Is This Answer Correct ? | 28 Yes | 1 No |
Answer / nkoonka
We only record when a transaction has taken place. So its just the purchases have taken but sales is just an intention.
The answer is...(d).
| Is This Answer Correct ? | 0 Yes | 0 No |
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