Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Accounting suspense Q

  • 31-05-2012 8:44pm
    #1
    SuchGold
    Registered Users Posts: 14 ✭


    McCarthy won a motor vehicle valued at €30,000 in a draw. McCarthy gave this vehicle to the business and took an old vehicle from the business valued at €22,500 which was to be used for private purposes. The only entry made in the firm’s books regarding both vehicles was a debit in the cash book of €22,500.


    Few questions:
    For the debit of 22,500 in the cash book what account is that?
    In the marking scheme, I think capital is debited by 22500 and credited by 30,000 but I'm confused cos im thinking it should be drawings debited by 22500 and capital credited by just 30,000.


Comments

  • #2
    treely
    Registered Users, Registered Users 2 Posts: 85 ✭✭treely


    Thats just the cash account. Usually a current asset in the question.

    Putting a debit in capital is the same as drawings.

    Remember, he's a motor car dealer so that will all affect purchases:)


  • #3
    SuchGold
    Registered Users Posts: 14 ✭SuchGold


    Ah right that makes sense now.
    But just for the cash, in the marking scheme it credits bank 22500 in the general journal so would they both be the same?


  • #4
    treely
    Registered Users, Registered Users 2 Posts: 85 ✭✭treely


    Yeah, cash and bank are effectively the same thing. Both treated the exact same way, so if you credited cash it'd be the same thing, and you'd still get the marks.


Advertisement