1. A firm buys stock for $100 by cheque and intends to
sell it for $200, so the double entry should be
a) Debit bank $100 and credit stock $ 100
b) Credit bank $ 200 and debit stock $ 200
c) Debit purchases $100 and credit sales $ 200
d) Debit purchases $ 100 and credit bank $ 100
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Answer Posted / nkoonka
We only record when a transaction has taken place. So its just the purchases have taken but sales is just an intention.
The answer is...(d).
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