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On 6 June 2017, R - Junior Cycle Business Studies - Question 6 - 2017
Question 6
On 6 June 2017, R. O'Connor, a retailer, purchased goods for €100 by cash. There was no VAT on these goods. Complete the ledger accounts of R. O'Connor showing the ... show full transcript
Worked Solution & Example Answer:On 6 June 2017, R - Junior Cycle Business Studies - Question 6 - 2017
Step 1
(ii) Cash/bank
Answer
The purchase of goods is recorded by debiting the Purchases account. This reflects an increase in expenses. Since it was paid in cash, we also credit the Cash/Bank account to indicate that cash has been used for the purchase. The entry is as follows:
Purchases A/c
- Date: 2017 June 6
- Details: Cash/bank
- €: 100
Cash/Bank A/c
- Date: 2017 June 6
- Details: Purchases
- €: 100
Step 2