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How to differentiate between cash purchases and credit purchases?

Good Purchase for Rs.15000, is Cash purchase or Credit purchase? What will be the Entry for Accounting Equation please?
Please go through this solution is it correct to add goods by 15000 and subtract 15000? Goods purchased  for Rs 15000 is cash purchased or credit purchase?

asked Jan 29, 2017 in Accounting Equation by Anand Prashad (23 points) 950 views
edited Jan 29, 2017 by Anand Prashad

1 Answer

0 votes
The question states that 'Goods purchased for Rs.15000' means that goods have been purchased for cash.  Whenever goods or anything is purchased on credit, the party from whom goods are purchased is always mentioned.  In the given question, no name is given, hence it is a cash purchase.

In the Accounting Equation two entries will be made on the Asset side.  Cash will be reduced by Rs.15000 and Rs.15000 will be added in stock.
answered Jan 29, 2017 by jbsclasses (3,971 points)