Question

4. Identify the accounts affected by the following transaction and show action to take in recording

the accounts in the double entry system.
Transaction
Account to be
credited
Account to be
debited
(i) Owner put cash into business.
(ii) Bought goods for cash.
(iii) Sold goods for cash.
(iv) Received cash for rent.
FDM
(v) Owner withdraws cash from business
for personal use.​

Answer 1

Step-by-step explanation:

A debit entry represent an increase while a credit entry represents a decrease in an expense and asset account . but in a liability and capital account , a credit entry increases and a debit entry decreases the balance

1) Owner put cash into business

Account to be credited Account to be debited

Capital (increases ) Cash (increases)

2)Bought good for cash

Cash (decreases) Merchandise Inventory (increases)

3) Sold goods for cash

Merchandise inventory(decreases ) Cash (increases)

4)Received cash for rent

Rental income(increases) Cash ( increases)

5)Owners withdraw cash

Cash (reduces) Drawing (increases)