JAMB - Accounts Principles Of Accounts (2024 - No. 7)
An amount paid in cash to John is Dr to John and Cr to
bank
debtors
cash
capital
Explanation
Dr to John: This signifies an increase in John's account balance. John could be an owner, an employee, or another type of payee.
Cr to Cash: This indicates a decrease in the cash account balance since cash is being paid out.
While John's account has a debit balance because it increases his receivables, the cash account is credited because cash is leaving the business.
Cr to Cash: This indicates a decrease in the cash account balance since cash is being paid out.
While John's account has a debit balance because it increases his receivables, the cash account is credited because cash is leaving the business.
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