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If Purchases Account is not credited in case of goods lost in transit then which account can be credited?
- a)Goods Lost in Transit Account
- b)Purchase Return Account
- c)Trading Account
- d)Sales Account
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
If Purchases Account is not credited in case of goods lost in transit ...
Explanation:
When goods are lost in transit, it means that the company has not received the goods that were purchased. In this case, the Purchases Account should not be credited because no purchase has been made. Instead, the Trading Account should be credited.
The Trading Account is a nominal account that represents the gross profit or loss made by the company in a particular period. It is credited when there is a decrease in the cost of goods sold, as in the case of goods lost in transit.
The Goods Lost in Transit Account is a special account that is used to record the losses incurred due to goods lost in transit. This account is debited when goods are lost in transit and credited when an insurance claim is settled.
The Purchase Return Account is used to record the returns made by the company to its suppliers. This account is credited when goods are returned to the supplier.
The Sales Account is used to record the sales made by the company. This account is credited when goods are sold.
Conclusion:
In conclusion, when goods are lost in transit, the Purchases Account should not be credited. Instead, the Trading Account should be credited as it represents the gross profit or loss made by the company in a particular period. The Goods Lost in Transit Account is used to record the losses incurred due to goods lost in transit, while the Purchase Return Account is used to record the returns made by the company to its suppliers. The Sales Account is used to record the sales made by the company.
When goods are lost in transit, it means that the company has not received the goods that were purchased. In this case, the Purchases Account should not be credited because no purchase has been made. Instead, the Trading Account should be credited.
The Trading Account is a nominal account that represents the gross profit or loss made by the company in a particular period. It is credited when there is a decrease in the cost of goods sold, as in the case of goods lost in transit.
The Goods Lost in Transit Account is a special account that is used to record the losses incurred due to goods lost in transit. This account is debited when goods are lost in transit and credited when an insurance claim is settled.
The Purchase Return Account is used to record the returns made by the company to its suppliers. This account is credited when goods are returned to the supplier.
The Sales Account is used to record the sales made by the company. This account is credited when goods are sold.
Conclusion:
In conclusion, when goods are lost in transit, the Purchases Account should not be credited. Instead, the Trading Account should be credited as it represents the gross profit or loss made by the company in a particular period. The Goods Lost in Transit Account is used to record the losses incurred due to goods lost in transit, while the Purchase Return Account is used to record the returns made by the company to its suppliers. The Sales Account is used to record the sales made by the company.
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If Purchases Account is not credited in case of goods lost in transit ...
C
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If Purchases Account is not credited in case of goods lost in transit then which account can be credited?a)Goods Lost in Transit Accountb)Purchase Return Accountc)Trading Accountd)Sales AccountCorrect answer is option 'C'. Can you explain this answer?
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