CA Foundation Exam > CA Foundation Questions > Purchased goods worth Rs.100000 from M/s ABC ...
Start Learning for Free
Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry?
Most Upvoted Answer
Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is...
Purchase of Goods
The transaction involves the purchase of goods worth Rs. 100,000 from M/s ABC Ltd. The purchase is made on credit, which means that the payment will be made at a later date. The journal entry for this transaction is as follows:
Journal Entry:
Date: [Date of the transaction]
Purchase A/C Dr. Rs. 100,000
To M/s ABC Ltd Rs. 100,000
Explanation:
- The journal entry starts with the date of the transaction.
- The account debited is "Purchase A/C" because it represents the purchases made by the business. The amount debited is Rs. 100,000, which is the value of the goods purchased.
- The account credited is "M/s ABC Ltd" because it is the supplier from whom the goods are purchased. The amount credited is Rs. 100,000.
Implications:
- The purchase of goods increases the inventory or stock of the business. Hence, the "Purchase A/C" is debited.
- The credit to "M/s ABC Ltd" indicates that the business has a liability to pay the supplier for the goods purchased. This liability will be settled at a later date as per the credit period.
Credit Period and Interest:
As per the terms mentioned, ABC Ltd has provided a credit period of 60 days. This means that the business has 60 days to make the payment for the goods purchased. If the payment is delayed beyond the credit period, an interest of 15% per annum will be charged.
Journal Entry for Interest:
If the payment is delayed beyond the credit period and the interest is charged, a separate journal entry will be required to account for the interest expense. Assuming that the payment is delayed beyond the credit period, the journal entry for the interest will be as follows:
Date: [Date of the interest charge]
Interest Expense A/C Dr. Rs. [Interest Amount]
To ABC Ltd Rs. [Interest Amount]
The "Interest Expense A/C" is debited to recognize the expense incurred due to the delayed payment. The "ABC Ltd" account is credited to reflect the liability for the interest charged.
Implications of Interest Entry:
The interest charged by ABC Ltd is an additional expense for the business. Hence, it is debited to the "Interest Expense A/C." The credit to ABC Ltd indicates that the business has a liability to pay the interest charged.
Overall, the initial journal entry records the purchase of goods on credit, while the subsequent interest entry accounts for the interest charged if the payment is delayed beyond the credit period.
The transaction involves the purchase of goods worth Rs. 100,000 from M/s ABC Ltd. The purchase is made on credit, which means that the payment will be made at a later date. The journal entry for this transaction is as follows:
Journal Entry:
Date: [Date of the transaction]
Purchase A/C Dr. Rs. 100,000
To M/s ABC Ltd Rs. 100,000
Explanation:
- The journal entry starts with the date of the transaction.
- The account debited is "Purchase A/C" because it represents the purchases made by the business. The amount debited is Rs. 100,000, which is the value of the goods purchased.
- The account credited is "M/s ABC Ltd" because it is the supplier from whom the goods are purchased. The amount credited is Rs. 100,000.
Implications:
- The purchase of goods increases the inventory or stock of the business. Hence, the "Purchase A/C" is debited.
- The credit to "M/s ABC Ltd" indicates that the business has a liability to pay the supplier for the goods purchased. This liability will be settled at a later date as per the credit period.
Credit Period and Interest:
As per the terms mentioned, ABC Ltd has provided a credit period of 60 days. This means that the business has 60 days to make the payment for the goods purchased. If the payment is delayed beyond the credit period, an interest of 15% per annum will be charged.
Journal Entry for Interest:
If the payment is delayed beyond the credit period and the interest is charged, a separate journal entry will be required to account for the interest expense. Assuming that the payment is delayed beyond the credit period, the journal entry for the interest will be as follows:
Date: [Date of the interest charge]
Interest Expense A/C Dr. Rs. [Interest Amount]
To ABC Ltd Rs. [Interest Amount]
The "Interest Expense A/C" is debited to recognize the expense incurred due to the delayed payment. The "ABC Ltd" account is credited to reflect the liability for the interest charged.
Implications of Interest Entry:
The interest charged by ABC Ltd is an additional expense for the business. Hence, it is debited to the "Interest Expense A/C." The credit to ABC Ltd indicates that the business has a liability to pay the interest charged.
Overall, the initial journal entry records the purchase of goods on credit, while the subsequent interest entry accounts for the interest charged if the payment is delayed beyond the credit period.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry?
Question Description
Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry?.
Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry?.
Solutions for Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? defined & explained in the simplest way possible. Besides giving the explanation of
Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry?, a detailed solution for Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? has been provided alongside types of Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? theory, EduRev gives you an
ample number of questions to practice Purchased goods worth Rs.100000 from M/s ABC ltd. The credit period is 60 days as given by ABC ltd. Any delay beyond the credit period will attract an interest of 15% p.a. Journal entry? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup