Question

A supplier sold inventory to Bikes & Autos Pty Ltd valued at $9000. Bikes & Autos Pty Ltd paid half in cash and received 30 days credit for the balance owing. The debit and credit entries for Bikes & Autos Pty Ltd are:

a. debit inventory $9000; credit accounts payable $4500, credit cash $4500.

b. debit cash $4500, debit accounts receivable $4500; credit inventory $9000.

c. debit accounts payable $4500, debit cash $4500; credit inventory $9000.

d. debit cash $9000; credit accounts receivable $4500, credit sales $4500.

Answer 1

It is a from a suppliers Inclusion their increase Ltd case of compound Journal Entry Where, Bikes and Autos Pty Ltd purchases inventory of Inventory will gncrease cument Asset, and As we know any in Assets has always Debit balance. Bikes and Autos Pty payment in cash which also decreases their cunent Asset. decrease in cunent Asset or Assels has de credit baloncs -Auk lay the payment in Any general awing for 30 days. It means that, payable (aument liability is inneased, Increase in cunent ll. liability has credit balance. makes half the nd in credit the account so о ang Keeping in mind, the above rules, the correct option would be (a). Defst Credit $ 9000 T$ 4500 To Accounts Inventory To cash 1$ 4500 Note: Half the amount in paid in cash $ 45oo. $9000 x L 2. And, Hay the amount has credit owed - $9000 * 1 / 2 $ 4500,