CSEET · Fundamentals of Accounting · Accounting Process
Goods costing ₹12,000 were sold on credit to Arun for ₹15,000. Which journal entry correctly records the sale under the rules of debit and credit?
Debit Arun's account and credit Sales account for ₹15,000. Arun becomes a debtor, an asset increasing on the debit side, and sales is income, credited at selling price. Cost is not used, and cash is not involved.
- AArun A/c Dr ₹15,000 to Sales A/c ₹15,000Correct
- BSales A/c Dr ₹15,000 to Arun A/c ₹15,000
- CArun A/c Dr ₹12,000 to Sales A/c ₹12,000
- DCash A/c Dr ₹15,000 to Sales A/c ₹15,000
Explanation
Arun is a debtor, a personal account, so the receiver (Arun) is debited. Sales is an income account, so it is credited. The entry is at selling price, ₹15,000, not cost. The cash entry is wrong because the sale is on credit.
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