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Double entry

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Double entry

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by Chris.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
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  • February 8, 2018 at 9:46 am #435867
    suleymanabuzerli
    Member
    • Topics: 84
    • Replies: 32
    • ☆☆

    A debit balance of $3,000 brought down on A Co’s account in B Co’s books
    means that: –
    A. A Co is owed $3,000 by B Co
    B. B Co has sold $3,000 of goods to A Co
    C. B Co is owed $3,000 by A Co
    D. A Co has sold $3,000 of goods to B Co

    l consider that the correct answer is A

    Because if debit balance of A co is 3000$
    In that case,B co owes 3000$ to A (as receivable)
    My answer and explanation are correct???

    February 8, 2018 at 10:30 am #435886
    Chris
    Member
    • Topics: 7
    • Replies: 600
    • ☆☆☆☆

    The answer is C. The account is in B’s books therefore view the account from B’s perspective. If it’s a debit balance, it’s an asset rather than a liability. Therefore, B has $3,000 receivable from A.

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