what is the journal entry for : creditors were written back Rs5000. and why ?
Journal | |||||
Date | Particulars | L.F. | Debit Amount Rs | Credit Amount Rs | |
| Creditors A/c | Dr. |
| 5,000 |
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| To Revaluation A/c |
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| 5,000 |
| (Written-back of creditors) |
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Written-back of creditors implies a reduction in the value of creditors. A reduction in the value of creditors implies gain to the firm. Therefore, written-back of creditors is credited to the Revaluation Account. This practice is in adherence to the rule of the Nominal Account, which states that “all losses are to be debited and all gains are to be credited”.