_________ will be credited if goods are given as charity?
Correct answer: C. Purchases
- A. Cash
- B. Charity
- C. Purchases
- D. SalesBanking
Explanation
When goods are donated, the charity or donation account is debited as an expense, while Purchases is credited to remove the goods from the purchases balance. Cash is not involved because no money is paid.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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