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| Topic: |
Business
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| Number of pages / Number of words: |
18 / 5018 |
Essay's paper body
The corresponding Dr is to the relevant expense or fixed asset "T" account (increase an expense or a new fixed asset).
Receipts
When cash is received, the cash balance increases, so we Dr cash. The corresponding Cr is to the sales or other income "T" account (increase income). It could also be the disposal of a fixed asset - see later...
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The corresponding Cr is to the sales or other income "T" account (increase income). It could also be the disposal of a fixed asset - see later.
Example
The best way to understand all this is by way of an example.
The following transactions occur, all in cash:
2.1.x5 Purchase stock for ?2000
6.1...
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