1. A firm buys stock for $100 by cheque and intends to sell it for $200, so th

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

Question Posted / kadire

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1. A firm buys stock for $100 by cheque and intends to sell it for $200, so the double entry shoul..

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

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1. A firm buys stock for $100 by cheque and intends to sell it for $200, so the double entry shoul..

Answer / mayur

c) Debit purchases $100 and credit sales $ 200

Is This Answer Correct ?

7 Yes

5 No

1. A firm buys stock for $100 by cheque and intends to sell it for $200, so the double entry shoul..

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).

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