Accounting for IGCSE & O level - Accounting Procedures (Section 20 - No. 44)
What is the correct accounting treatment if a business acquires a non-current asset?
Debit the asset account and credit the bank account.
Debit the expense account and credit the bank account.
Credit the asset account and debit the bank account.
Debit the bank account and credit the asset account.
Explanation
When a non-current asset is acquired, the asset account is debited and the bank account is credited. This reflects the increase in assets and the decrease in cash.
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