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LC accounting Help Thread
Comments
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Can anyone explain to me the reasoning behind this suspense Q- 2008 (ii)
"O'Shea (boutique) sold privately owned jewelry to a debtor of the business for 2800euro. This sale had been treated in error as a cash sale of stock. O'Shea intended that the proceeds of this sale were to be retained in the business."
The marking scheme says that cash is credited 2800 and sales is debited 2800.. I thought when it says cash, you assume bank??
I understand how to deal with the debtors and Capital part just not the other part! 0 -
lizardspock wrote: »Can anyone explain to me the reasoning behind this suspense Q- 2008 (ii)
"O'Shea (boutique) sold privately owned jewelry to a debtor of the business for 2800euro. This sale had been treated in error as a cash sale of stock. O'Shea intended that the proceeds of this sale were to be retained in the business."
The marking scheme says that cash is credited 2800 and sales is debited 2800.. I thought when it says cash, you assume bank?? I understand how to deal with the debtors and Capital part just not the other part!
Well the general rule I was taught is that if there's enough in cash you credit cash. But if there isn't enough in cash you credit bank (as you can't have a negative cash figure). That being said, I can't imagine you'd lose any marks for crediting bank, the balance will work out just the same.0
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