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Post Info TOPIC: Question from Book-Keeping for Dummies


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Question from Book-Keeping for Dummies
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Hello Book-keepers,

Here is a question from Book-Keeping for Dummies:

Question: On 31 March, you sell £5,000 worth of goods and receive £5,000 in cash.  Write down the journal entries for this transaction.

My answer is:

31 March Debit the cash account £5,000

31 March Credit the STOCK account £5,000

The correct answer is:

31 March Debit the cash account £5,000

31 March Credit the SALES account £5,000

My answer does not register that there has been a sale.

The correct answer does not register that the stock asset has diminished.

Why is one correct and not the other?

Thank you.



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