Cash a/c dr 10,000
ruchi dr 15,000
to sales a/c. 25,000

Sale of Goods

When goods are sold, a transaction takes place between the seller and the buyer. The buyer pays a certain amount to the seller and the seller transfers the ownership of the goods to the buyer. In this case, goods costing Rs 20,000 were sold for Rs 25,000 to Ruchi.

Profit and Loss

The difference between the selling price and the cost price is the profit or loss incurred by the seller. In this case, the selling price is Rs 25,000 and the cost price is Rs 20,000. Therefore, the profit made by the seller is Rs 5,000.

Payment Received

When goods are sold, the buyer may pay the entire amount immediately or may pay a part of it. In this case, Rs 10,000 was received by the seller in cash from Ruchi.

Accounting Entries

The sale of goods and the receipt of cash need to be recorded in the books of accounts. The following accounting entries will be made:

1. To record the sale of goods:
Accounts Receivable (Ruchi) Rs 25,000
Sales Rs 25,000

2. To record the cost of goods sold:
Cost of Goods Sold Rs 20,000
Inventory Rs 20,000

3. To record the receipt of cash:
Cash Rs 10,000
Accounts Receivable (Ruchi) Rs 10,000

Conclusion

The sale of goods for Rs 25,000 and the receipt of Rs 10,000 in cash from Ruchi resulted in a profit of Rs 5,000 for the seller. The accounting entries were made to record the transaction in the books of accounts.