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Sale of office furniture should be debited to:
- a)Furniture account
- b)Sales account
- c)Purchase account
- d)Cash account
Correct answer is option 'B'. Can you explain this answer?
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Sale of office furniture should be debited to:a)Furniture accountb)Sal...
Sales (accounting) In bookkeeping, accounting, and finance, Net sales are operating revenues earned by a company for selling its products or rendering its services. Also referred to as revenue, they are reported directly on the income statement as Sales or Net sales.
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Sale of office furniture should be debited to:a)Furniture accountb)Sal...
Explanation:
Debiting the Sales Account:
- When office furniture is sold, the transaction should be recorded by debiting the Sales Account.
- The Sales Account is a nominal account used to record the revenue generated from the sale of goods or services.
- By debiting the Sales Account, we are increasing the revenue or income of the business, which reflects the amount earned from selling the office furniture.
Other Accounts:
- The Furniture Account is a real account used to record the purchase and disposal of furniture. It is not affected directly when office furniture is sold.
- The Purchase Account is used to record the purchases of goods or assets, so it is not relevant in this context.
- The Cash Account is affected if the sale is made for cash, but it is credited as cash is received. Therefore, it is not debited when office furniture is sold.
Recording the Sale:
- When office furniture is sold, the journal entry will be: Debit Sales Account, Credit Cash or Accounts Receivable (depending on the mode of payment).
- This journal entry accurately reflects the revenue earned from the sale of office furniture and the corresponding increase in the Sales Account.
Therefore, the sale of office furniture should be debited to the Sales Account as it accurately represents the revenue generated from the sale transaction.
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Sale of office furniture should be debited to:a)Furniture accountb)Sales accountc)Purchase accountd)Cash accountCorrect answer is option 'B'. Can you explain this answer?
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