Question
XYZ Ltd. sold goods on credit to ABC Ltd. for Rs. 50,000 on 1st January 2023. ABC Ltd. returned goods worth Rs. 10,000 on 5th
XYZ Ltd. sold goods on credit to ABC Ltd. for Rs. 50,000 on 1st January 2023. ABC Ltd. returned goods worth Rs. 10,000 on 5th January 2023. On 10th January 2023, XYZ Ltd. received a cheque from ABC Ltd. for the balance amount due. The cheque was deposited in the bank on the same day. XYZ Ltd. follows the mercantile system of accounting.
1. Record the above transactions in the books of XYZ Ltd.
2. Prepare the necessary ledger accounts for the above transactions.
Step by Step Solution
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The detailed answer for the above question is provided below 1 Date Particulars Debit Credit 1st January 2023 ABC Ltd AC 50000 Sales AC 50000 5th January 2023 Sales return AC 10000 ABC Ltd Ac 10000 10th January 2023 Bank AC 40000 ABC Ltd Ac 40000 Explanation On 1st January 2023 when XYZ Ltd sold goods on credit to ABC Ltd for Rs 50000 the entry is to debit ABC Ltd Ac and credit Sales Ac On 5th January 2023 when ABC Ltd returned goods worth Rs 10000 the entry is to debit Sales Return Ac and credit ABC Ltd Ac On 10th January 2023 when XYZ Ltd received a cheque of Rs 40000 from ABC Ltd the entry is to debit ABC Ltd Ac and credit Bank Ac for the same amount 2 Here are the ledger accounts for XYZ Ltd Sales Account Date Particulars Debit Credit 1st Jan ...
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Introduction To Financial Accounting
Authors: Anne Marie Ward, Andrew Thomas
9th Edition
1526803003, 978-1526803009
