PURCHASES & SALES
Transactions on credit
· Goods bought on credit are bought from a Creditor.
· Goods sold on credit are sold to a debtor.
Double entry rules: Purchases of Goods on Credit
Debit Purchases Account
Credit Creditor Account
· With the cost of goods bought
Debit the Creditor Account
Credit Bank Account
· With payment, when its made
Example: Purchases
Record the following transactions in the appropriate ledger accounts:
1. Oct 6 Bought goods on credit from a creditor...............................1200 euro
2. Oct 15 Paid in full for goods bought on 6 October.
Transactions on credit
· Goods bought on credit are bought from a Creditor.
· Goods sold on credit are sold to a debtor.
Double entry rules: Purchases of Goods on Credit
Debit Purchases Account
Credit Creditor Account
· With the cost of goods bought
Debit the Creditor Account
Credit Bank Account
· With payment, when its made
Example: Purchases
Record the following transactions in the appropriate ledger accounts:
1. Oct 6 Bought goods on credit from a creditor...............................1200 euro
2. Oct 15 Paid in full for goods bought on 6 October.
Double Entry Rules: Sale of Goods on Credit.
Debit Debtor Account
Credit Sales Account
· With the value of goods sold
Debit Bank Account
Credit Debtor Account
· With payment, when it is received.
Example: Sales
Record the following transactions in the appropriate ledger accounts:
1. Feb 12 Sold goods on credit to a debtor..........................3000 euro.
2. Feb 27 Lodged cheque received in payment for goods sold on 12 February.
Debit Debtor Account
Credit Sales Account
· With the value of goods sold
Debit Bank Account
Credit Debtor Account
· With payment, when it is received.
Example: Sales
Record the following transactions in the appropriate ledger accounts:
1. Feb 12 Sold goods on credit to a debtor..........................3000 euro.
2. Feb 27 Lodged cheque received in payment for goods sold on 12 February.
(O'Riordan, K. (2004) Leaving Certificate Accounting. Revised Edition. Tallaght, Dublin 24. Folens Publishers.)
Junior Cert Question H/L- Books of First Entry
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Advised Practice Worksheets
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