CA Foundation · Accounting · Theoretical Framework
Bhatia Traders sold goods to a customer for ₹60,000 on credit. The cost of the goods was ₹45,000. Later the firm purchased goods worth ₹20,000 for cash. Under the dual aspect concept, which statement about the sale entry is correct?
On a credit sale of ₹60,000, debtors (an asset) rise by ₹60,000 and sales revenue rises by ₹60,000. The dual aspect concept requires two equal and opposite effects, and no cash comes in because the sale is on credit.
- ADebtors increase by ₹60,000 and sales (revenue) increase by ₹60,000Correct
- BDebtors increase by ₹60,000 and cash increases by ₹60,000
- CDebtors increase by ₹45,000 and stock decreases by ₹45,000
- DSales increase by ₹60,000 and capital decreases by ₹60,000
Explanation
Every transaction has two equal aspects. A credit sale increases an asset (debtors) by ₹60,000 and increases revenue by ₹60,000. Option B is wrong because no cash is received on a credit sale. Option D wrongly reduces capital.
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