why in quest 57 of chapter 4 admission of a partner why decrease in creditors of 10,000 not written on credit side of revaluation account ? plsss explain
Dear Student,
In question number 57, adjustment number (a) states that "Out of Creditors, a sum of Rs 10,000 is due to D which will be transferred to his Capital" it means, D is one of the creditors of the business, therefore, the firm will not pay him his due money rather transfer that due amount to his Capital Amount. For this, the journal entry will be:
Creditors A/c Dr.
To D's Capital A/c
Therefore, the credit side of revaluation a/c will not show reduction in creditors.
Keep posting for further doubts!!
In question number 57, adjustment number (a) states that "Out of Creditors, a sum of Rs 10,000 is due to D which will be transferred to his Capital" it means, D is one of the creditors of the business, therefore, the firm will not pay him his due money rather transfer that due amount to his Capital Amount. For this, the journal entry will be:
Creditors A/c Dr.
To D's Capital A/c
Therefore, the credit side of revaluation a/c will not show reduction in creditors.
Keep posting for further doubts!!